7 Augusta Inc. is a manufacturing company whose total factory overhead costs fluctuate somewhat from month to month. The manager of the company believes that the cost driver is the number of...


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7 Augusta Inc. is a manufacturing company whose total factory overhead costs fluctuate somewhat from month to month.<br>The manager of the company believes that the cost driver is the number of machine-hours used in its production facility.<br>These costs for the last four months in 2020 are given below.<br>Machine-hours<br>Total factory overhead<br>%$4<br>104,400<br>September<br>October<br>6,500<br>10,000<br>8,500<br>2$<br>130,000<br>$ 118,500<br>November<br>5,000<br>24<br>100,000<br>December<br>The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these<br>costs at the 5,000 machine-hours level of activity as follows:<br>$ 10,000<br>Indirect materials (variable)<br>Rent (fixed)<br>Maintenance (mixed)<br>Total factory overhead costs<br>50,000<br>2$<br>100,000<br>Assume that all data are within the relevant range, using the high-low method how much maintenance cost would you<br>expect the company to incur at an operating level of 7200 machine-hours? (Round to the nearest dollars.)<br>А.<br>24<br>58,800<br>B.<br>2$<br>51,600<br>С.<br>$ 73,200<br>D. $<br>37,920<br>E. None of the above<br>8 During the month of May, Jackson Inc. found that the direct labor cost totaled $15,000. If direct labor cost was 40% of<br>prime cost and 60% of conversion cost then total manufacturing costs during May were:<br>$62,500<br>$47,500<br>$25,000<br>$37,500<br>А.<br>B.<br>С.<br>D.<br>E. None of the above<br>

Extracted text: 7 Augusta Inc. is a manufacturing company whose total factory overhead costs fluctuate somewhat from month to month. The manager of the company believes that the cost driver is the number of machine-hours used in its production facility. These costs for the last four months in 2020 are given below. Machine-hours Total factory overhead %$4 104,400 September October 6,500 10,000 8,500 2$ 130,000 $ 118,500 November 5,000 24 100,000 December The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 5,000 machine-hours level of activity as follows: $ 10,000 Indirect materials (variable) Rent (fixed) Maintenance (mixed) Total factory overhead costs 50,000 2$ 100,000 Assume that all data are within the relevant range, using the high-low method how much maintenance cost would you expect the company to incur at an operating level of 7200 machine-hours? (Round to the nearest dollars.) А. 24 58,800 B. 2$ 51,600 С. $ 73,200 D. $ 37,920 E. None of the above 8 During the month of May, Jackson Inc. found that the direct labor cost totaled $15,000. If direct labor cost was 40% of prime cost and 60% of conversion cost then total manufacturing costs during May were: $62,500 $47,500 $25,000 $37,500 А. B. С. D. E. None of the above

Jun 11, 2022
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