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Arcadia Company incurred the following costs and machine hours during the first three months of the current year

Arcadia Company incurred the following costs and machine hours during the first three months of the current year. Assume that the driver for all costs is machine hours.

 

Type of cost  JanuaryFebruaryMarch

Electricity$20,000$15,000$18,000

Depreciation15,00015,00015,000

Factory supplies9,6005,6007,600

Property taxes12,00012,00012,000

 

Machine hours1,200700950

 

A.Using the high-low method, construct a cost formula for electricity cost.

B.If Arcadia had total costs in April of $53,000, how many machine hours did they incur during April?

C.If Arcadia expects to incur 1,500 machine hours in May, what would be the estimate of their total costs?

 

 

 

 

Intercept7,600

X Variable 15.10

 

A.Using the results of regression, calculate the fixed cost of maintenance and the variable rate per machine hour.

B.Using the results of regression, construct the cost formula for the total maintenance cost.

C.Calculate the budgeted cost for maintenance assuming that 610 hours are worked next month.

 

 

 

9.Andover Company makes weather balloons. The company controller wanted to calculate the fixed and variable costs associated with the maintenance costs incurred by the factory. Data for the past six months were collected.

 

MaintenanceMachine

Monthcosthours

January$10,120526

February9,560389

March9,712412

April10,460569

May10,226541

June9,686399

 

A.Using the high low method, calculate the fixed cost of maintenance and the variable rate per machine hour.

B.Using the high low method, construct the cost formula for the total maintenance cost.

C.Calculate the budgeted cost for maintenance assuming that 610 hours are worked next month.

Mar 13 2020 View more View Less

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