1. Business
  2. Accounting
  3. the following selected data were taken from the accounting records...

Question: the following selected data were taken from the accounting records...

Question details

The following selected data were taken from the accounting records of Metcalf Manufacturing. The company uses direct-labor hours as its cost driver for overhead costs. Month Direct-Labor Hours Manufacturing Overhead January 20,000 $ 684,000 February 22,000 723,000 March 32,000 882,000 April 23,000 750,000 May 27,000 780,000 June 25,000 777,000 March’s costs consisted of machine supplies ($128,000), depreciation ($24,000), and plant maintenance ($730,000). These costs exhibit the following respective behavior: variable, fixed, and semivariable. The manufacturing overhead figures presented in the preceding table do not include Metcalf’s supervisory labor cost, which is step-fixed in nature. For volume levels of less than 15,000 hours, supervisory labor amounts to $69,000. The cost is $138,000 from 15,000–29,999 hours and $207,000 when activity reaches 30,000 hours or more. Required: 1. Determine the machine supplies cost and depreciation for January. 2. Using the high-low method, analyze Metcalf’s plant maintenance cost and calculate the monthly fixed portion and the variable cost per direct-labor hour. 3. Assume that present cost behavior patterns continue into the latter half of the year. Estimate the total amount of manufacturing overhead the company can expect in November if 28,200 direct-labor hours are worked.

Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution