Angie March owns a catering company that stages banquets and parties for both individuals and companies. The business is seasonal, with heavy demand during the summer months and year-end holidays and light demand at other times. Angie has gathered the following cost information from the past year: Month Labor Hours Overhead Costs January 2,800 $51,840 February 2,100 49,120 March 2,200 50,120 April 3,300 53,640 May 3,600 56,520 June 4,800 60,040 July 7,100 68,120 August 6,800 65,240 September 5,700 60,680 October 3,800 57,440 November 2,400 52,000 December 5,800 61,640 Total 50,400 $686,400 (a) Correct answer icon Your answer is correct. Identify the high and low points. Activity Level $ High point enter the activity level for high point $enter the high point in dollars Low point enter the activity level for low point $enter the low point in dollars Using the high-low method, compute the overhead cost per labor hour and the fixed overhead cost per month. (Round variable cost to 2 decimal places, e.g. 15.25 and fixed cost to 0 decimal places, e.g. 5,275.) Variable cost = $enter the variable cost per labor hour in dollars rounded to 2 decimal places per labor hour Fixed cost = $enter the fixed cost amount in dollars rounded to 0 decimal places eTextbook and Media Attempts: 1 of 3 used (b) Incorrect answer icon Your answer is incorrect. Angie has booked 4,200 labor hours for the coming month. How much overhead should she expect to incur? Total cost = $enter the total cost amount in dollars rounded to 0 decimal places eTextbook and Media Save for Later Attempts: 1 of 3 used Submit Answer (c) If Angie books one more catering job for the month, requiring 350 labor hours, how much additional overhead should she expect to incur? Additional overhead = $enter the additional overhead amount in dollars rounded to 0 decimal places

Angie March owns a catering company that stages banquets and parties for both individuals and companies. The business is seasonal, with heavy demand during the summer months and year-end holidays and light demand at other times. Angie has gathered the following cost information from the past year: Month Labor Hours Overhead Costs January 2,800 $51,840 February 2,100 49,120 March 2,200 50,120 April 3,300 53,640 May 3,600 56,520 June 4,800 60,040 July 7,100 68,120 August 6,800 65,240 September 5,700 60,680 October 3,800 57,440 November 2,400 52,000 December 5,800 61,640 Total 50,400 $686,400 (a) Correct answer icon Your answer is correct. Identify the high and low points. Activity Level $ High point enter the activity level for high point $enter the high point in dollars Low point enter the activity level for low point $enter the low point in dollars Using the high-low method, compute the overhead cost per labor hour and the fixed overhead cost per month. (Round variable cost to 2 decimal places, e.g. 15.25 and fixed cost to 0 decimal places, e.g. 5,275.) Variable cost = $enter the variable cost per labor hour in dollars rounded to 2 decimal places per labor hour Fixed cost = $enter the fixed cost amount in dollars rounded to 0 decimal places eTextbook and Media Attempts: 1 of 3 used (b) Incorrect answer icon Your answer is incorrect. Angie has booked 4,200 labor hours for the coming month. How much overhead should she expect to incur? Total cost = $enter the total cost amount in dollars rounded to 0 decimal places eTextbook and Media Save for Later Attempts: 1 of 3 used Submit Answer (c) If Angie books one more catering job for the month, requiring 350 labor hours, how much additional overhead should she expect to incur? Additional overhead = $enter the additional overhead amount in dollars rounded to 0 decimal places

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter18: Activity-based Costing

Section: Chapter Questions

Problem 13E: Handbrain Inc. is considering a change to activity-based product costing. The company produces two...

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(a)

Correct answer icon

Your answer is correct.

Identify the high and low points.

	Activity Level	$
High point	enter the activity level for high point	$enter the high point in dollars
Low point	enter the activity level for low point	$enter the low point in dollars

Using the high-low method, compute the overhead cost per labor hour and the fixed overhead cost per month. (Round variable cost to 2 decimal places, e.g. 15.25 and fixed cost to 0 decimal places, e.g. 5,275.)

Variable cost	=	$enter the variable cost per labor hour in dollars rounded to 2 decimal places	per labor hour
Fixed cost	=	$enter the fixed cost amount in dollars rounded to 0 decimal places

eTextbook and Media

Attempts: 1 of 3 used

(b)

Incorrect answer icon

Your answer is incorrect.

Angie has booked 4,200 labor hours for the coming month. How much overhead should she expect to incur?

Total cost =

$enter the total cost amount in dollars rounded to 0 decimal places

eTextbook and Media

Save for Later

Attempts: 1 of 3 used

Submit Answer

(c)

If Angie books one more catering job for the month, requiring 350 labor hours, how much additional overhead should she expect to incur?

Additional overhead =

$enter the additional overhead amount in dollars rounded to 0 decimal places

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Month	Labor Hours		Overhead Costs
January		2,800		$51,840
February		2,100		49,120
March		2,200		50,120
April		3,300		53,640
May		3,600		56,520
June		4,800		60,040
July		7,100		68,120
August		6,800		65,240
September		5,700		60,680
October		3,800		57,440
November		2,400		52,000
December		5,800		61,640
Total		50,400		$686,400