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Manufacturing Overhead Cost Analysis

The document provides information about 7 problem solving questions related to cost accounting. Question 1 provides cost functions for manufacturing overhead and asks to calculate overhead costs given production information. Question 2 asks to calculate fixed electricity costs using cost and production data over 6 months. Question 3 asks to calculate estimated supplies costs using the high-low method with costs and production volumes over 3 months.

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James Ezra Evangelio
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311 views2 pages

Manufacturing Overhead Cost Analysis

The document provides information about 7 problem solving questions related to cost accounting. Question 1 provides cost functions for manufacturing overhead and asks to calculate overhead costs given production information. Question 2 asks to calculate fixed electricity costs using cost and production data over 6 months. Question 3 asks to calculate estimated supplies costs using the high-low method with costs and production volumes over 3 months.

Uploaded by

James Ezra Evangelio
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Problem Solving

1. The following cost functions were developed for manufacturing overhead costs:

Manufacturing Overhead Cost Cost Function

Electricity $200 + $20 per direct labor hour

Maintenance $400 + $30 per direct labor hour

Supervisors' salaries $20,000 per month

Indirect materials $16 per direct labor hour

If January production is expected to be 2,000 units requiring 3,000 direct labor hours, estimated manufacturing overhead costs
would be?

2. The following information is available for electricity costs for the last six months of the year:

Month Production Electricity Costs


Volume
January 1,400 $2,200

February 2,800 5,400

March 3,200 5,700

April 1,750 3,900

May 1,200 2,400

June 2,100 4,050


What are the fixed costs?

3. The following information was available about supplies cost for the second quarter of the year:

Month Production Supplies Cost


Volume

July 700 $3,185

August 1,600 7,100

September 600 2,700

Using the high-low method, the estimate of supplies cost at 1,000 units of production is?

4. Assume the following information:


Volume Total Cost
100 units $1,300
90 units $1,500
106 units $1,750

What is the variable cost per unit?


5. Spokane Corporation found its maintenance cost and sales dollars to be somewhat correlated. Last year's high and low
observations were as follows:

Maintenance Cost Sales


$46,000 $600,000
$52,000 $800,000
What is the fixed portion of the maintenance cost?

6. The Stanford Company incurred the following maintenance cost during a five month period:
Month Production Volume Maintenance Costs
June 75 $250
July 115 310
August 190 400
September 60 240
October 135 355
Compute the estimate of the fixed portion of maintenance costs using the method of least squares. Rounded to dollars, this
value would be?

7. Information from the records of Chrome Ponies Enterprises for June 2018 is as follows:

Sales $41,000
Direct labor 10,000
Selling and administrative expenses 7,000
Direct materials purchases 6,000
Factory overhead 13,500

Inventories

June 1, 2018 June 30, 2018

Direct materials $1,200 $1,400

Work in process 2,500 2,800

Finished goods 2,300 1,900

What was the cost of materials used in production?


How much is the total manufacturing cost added?
How much is the cost of goods manufactured?
How much is the cost of goods sold?
How much is net income?

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