Ask Experts Questions for FREE Help !
Ask
    sagnik2422's Avatar
    sagnik2422 Posts: 77, Reputation: 1
    Junior Member
     
    #1

    Sep 19, 2014, 08:33 PM
    High Low Method Accounting Need Help
    Kingsport Containers Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes predetermined overhead rates on a quarterly basis using the number of units to be produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below:

    Quarter

    First Second Third Fourth
    Direct materials $ 200,000 $ 100,000 $ 50,000 $ 150,000
    Direct labor 80,000 40,000 20,000 60,000
    Manufacturing overhead 230,000 206,000 194,000 ?








    Total manufacturing costs (a) $ 510,000 $ 346,000 $ 264,000 $ ?
















    Number of units to be produced (b) 80,000 40,000 20,000 60,000
    Estimated unit product cost (a ÷ b) $ 6.38 $ 8.65 $ 13.20 $ ?


    Management finds the variation in quarterly unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product.

    Required:
    1-a. Using the high-low method, estimate the fixed manufacturing overhead cost per quarter and the variable manufacturing overhead cost per unit. (Round the "Variable manufacturing overhead per unit" to 2 decimal places.)

    I am really confused , I know variable cost = change in activity/ change in cost but I don't know where to go from here, and do I need to find the question marks? Also, how do I do that? Also I know Fixed = Total - Variable Cost
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
    Ultra Member
     
    #2

    Sep 24, 2014, 04:33 AM
    Didn't I answer your question?

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search


Check out some similar questions!

Accounting total overhead cost using high-low method? [ 2 Answers ]

ABC Co.'s total overhead costs at various levels of activities (all within the same relevant range) are presented below: Month Flying Hours Total Overhead Costs September 8,000 $ 92,000 October 12,000 $ 106,000 November 16,000 $ 120,000 December 4,000 $ 78,000

High low method accounting [ 1 Answers ]

Using the high low method, what is the variable cost per unit march 25,600, April 26,200m May 27,600, June 26,450, July 26,000, August 26,500


View more questions Search