Nas Corporation’s managers in the stamping department have been studying the overhead cost and the relationship with machine hours. Data from the most recent 12 months. Month Overhead Machine hours January 5,030 2,730 February 1,600 600 March 7,210 3,403 April 4,560 2,200 May 6,880 3,411 June 6,520 2,586 July 6,230 3,364 August 5,570 2,411 September 7,728 3,960 October 5,810 2,897 November 4,580 2,207 December 6,010 2,864 The manager of the department has requested a regression analysis of these two variables. The staff person performing the analysis decided to exclude February. She observed the volume of activity was very low for that month because of two factors: A severe flue outbreak and an electrical fire that disrupted operations for about 10 working days. Using the high-low point method, compute the fixed cost. Using the high-low point method, how much is the estimated overhead costs for 3,000 machine hours?

Nas Corporation’s managers in the stamping department have been studying the overhead cost and the relationship with machine hours. Data from the most recent 12 months. Month Overhead Machine hours January 5,030 2,730 February 1,600 600 March 7,210 3,403 April 4,560 2,200 May 6,880 3,411 June 6,520 2,586 July 6,230 3,364 August 5,570 2,411 September 7,728 3,960 October 5,810 2,897 November 4,580 2,207 December 6,010 2,864 The manager of the department has requested a regression analysis of these two variables. The staff person performing the analysis decided to exclude February. She observed the volume of activity was very low for that month because of two factors: A severe flue outbreak and an electrical fire that disrupted operations for about 10 working days. Using the high-low point method, compute the fixed cost. Using the high-low point method, how much is the estimated overhead costs for 3,000 machine hours?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 1EA: Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000 direct labor...

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Nas Corporation’s managers in the stamping department have been studying the overhead cost and the relationship with machine hours. Data from the most recent 12 months.

Month Overhead Machine hours

January 5,030 2,730

February 1,600 600

March 7,210 3,403

April 4,560 2,200

May 6,880 3,411

June 6,520 2,586

July 6,230 3,364

August 5,570 2,411

September 7,728 3,960

October 5,810 2,897

November 4,580 2,207

December 6,010 2,864

The manager of the department has requested a regression analysis of these two variables. The staff person performing the analysis decided to exclude February. She observed the volume of activity was very low for that month because of two factors: A severe flue outbreak and an electrical fire that disrupted operations for about 10 working days.

Using the high-low point method, compute the fixed cost.

Using the high-low point method, how much is the estimated overhead costs for 3,000 machine hours?

Using the least square (regression) analysis, compute the fixed cost.

Using the least square (regression) analysis, how much is the estimated overhead costs for 3,000 machine hours?

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