The The levels of production and of manufacturing overhead for the first five mo

Question

The The levels of production and of manufacturing overhead for the first five months of 2009 for Apex Products are shown below.

UN                                           Units Produced                 Mfg. Overhead

JJ January                                     11,500                              $58,650

Fs February                                   12,250                             $59,413

        March                                       11,125                             $58,262

   A  April                                         11,950                             $59,104

       May                                           10,750                             $57,889

        a. Using the high-low method, compute the variable element of manufacturing overhead per unit of production.

Please show ALL WORK for answers.

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Explanation / Answer

  a. Using the high-low method, compute the variable element of manufacturing overhead per unit of production.

Variable cost per unit = (59413-57889)/(12250-10750) = 1.016

b. Using the high-low method, compute monthly overhead cost.     

Monthly overhead cost = 59413- 12250*1.016 = $46967

c. Using the high-low method, compute the total estimated manufacturing overhead for June.   

Total Estimated manufacturing overhead for june = 46967+ (1.016 * Expected unit to be produce)

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