Samuel Amo Tobin, the Executive of Tobinco Pharmaceutical Co., has asked for information about the cost behaviour of manufacturing support costs. Specifically, she wants to know how much support cost is fixed and how much is variable. The following data are the only records available: Month Machine Hours Support Costs Мay 1400 $12,500 June 1750 $13,500 July 1000 $7,900 August 850 $9,000 September 1250 $11,000 Find the monthly fixed support cost and variable support cost per machine hour using the high-low method. Develop the support cost function of Tobinco b. Pharmaceutical Co. Estimate the support cost if the machine hours are с. i. 3500 hours ii. 5070 hours

Samuel Amo Tobin, the Executive of Tobinco Pharmaceutical Co., has asked for information about the cost behaviour of manufacturing support costs. Specifically, she wants to know how much support cost is fixed and how much is variable. The following data are the only records available: Month Machine Hours Support Costs Мay 1400 $12,500 June 1750 $13,500 July 1000 $7,900 August 850 $9,000 September 1250 $11,000 Find the monthly fixed support cost and variable support cost per machine hour using the high-low method. Develop the support cost function of Tobinco b. Pharmaceutical Co. Estimate the support cost if the machine hours are с. i. 3500 hours ii. 5070 hours

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 5CE: Refer to Cornerstone Exercise 3.4 for data on Dohini Manufacturing Companys purchasing cost and...

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