The Wildcat Company Has Provided the Following Information for the Factory

question 195

Essay

The Wildcat Company has provided the following information for the factory overhead cost pool:
Required:
Using the high-low method and the information provided above,
a.identify the linear cost function equation and
b.estimate the total cost at 36,000 units of output.

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Definitions:

Scrap Value

The estimated residual value of an asset at the end of its useful life.

Manufacture Further

The process of conducting additional production activities intended to enhance the value or functionality of a product.

Incremental Cost

The additional cost associated with producing one more unit of a product or service.

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, maintenance, and factory management salaries.