ABC Company's Total Overhead Costs at Various Levels of Activity

question 90

Essay

ABC Company's total overhead costs at various levels of activity are presented below:

Assume that the overhead costs above consist of utilities, supervisory salaries, and maintenance. At the 50,000-machine-hour level of activity, these costs are presented below:

The company wants to break down the maintenance cost into its basic variable and fixed cost elements.

Required:

a) Estimate the maintenance cost for June.
b) Use the high-low method to estimate the cost formula for maintenance cost.
c) Estimate the total overhead cost at an activity level of 55,000 machine hours, using the separate estimates you obtained for its components.
d) Estimate the total overhead cost at an activity level of 55,000 machine hours, independent of the separate estimates you obtained for its components.

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Definitions:

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An individual skilled in playing one or more musical instruments or involved in musical composition or performance.

Architect

A professional who plans, designs, and oversees the construction of buildings, ensuring aesthetics, functionality, and safety.

Physical Sensations

Bodily feelings or experiences that result from sensory information or physical activity.

Parietal

Pertaining to the parietal lobe of the brain, which is involved in processing sensory information and spatial orientation.