The following information is available regarding the total manufacturing overhead costs of Paymore, Inc., for five months in 2010: Month February Machine hours 6,900 MOH6,250 March Machine hours 5,000 MOH 5,375 April Machine hours 6,300 MOH 6,025 May Machine houes 9,333 MOH 7,975 June Machine hours 6,8333 MOH 6,050 REQUIRED: Using the high-low method, compute the following: The equation of the cost and quantity. Use the cost relationship determined in part (1) to estimate the total manufacturing overhead costs for July 2010, given that 7,250 machine-hours are scheduled.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
The following information is available regarding the total
Month
February
Machine hours 6,900
MOH6,250
March
Machine hours 5,000
MOH 5,375
April
Machine hours 6,300
MOH 6,025
May
Machine houes 9,333
MOH 7,975
June
Machine hours 6,8333
MOH 6,050
REQUIRED: Using the high-low method, compute the following:
- The equation of the cost and quantity.
- Use the cost relationship determined in part (1) to estimate the total manufacturing overhead costs for July 2010, given that 7,250 machine-hours are scheduled.
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