Tessmer Manufacturing Company Produces Inventory in a Highly Automated Assembly

question 92

Essay

Tessmer Manufacturing Company produces inventory in a highly automated assembly plant in Windsor, Ontario. The automated system is in its first year of operation and management is still unsure of the best way to estimate the overhead costs of operations for budgetary purposes. For the first six months of operations, the following data were collected:
Required:
a. Use the high-low method to determine the estimating cost function with machine-hours as the cost driver.
b. Use the high-low method to determine the estimating cost function with kilowatt-hours as the cost driver.
c. For July, the company ran the machines for 3,150 hours and used 4,180,000 kilowatt-hours of power. The overhead costs totaled $114,000. Which cost driver was the best predictor for July?

Identify and describe various natural attractants used by plants and animals.

Understand and define depletion and the circumstances under which it occurs.

Recognize and calculate impairment losses on assets.

Calculate key financial ratios, such as the fixed asset turnover ratio, and understand their implications.

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Definitions:

Corporate Social Responsibility

A business model that helps a company be socially accountable—to itself, its stakeholders, and the public.

Stakeholders

Individuals or organizations directly or indirectly affected by the activities and performance of a business.

Overall Equipment Effectiveness

A measure of manufacturing productivity that calculates how well a manufacturing operation utilizes its equipment in terms of availability, performance, and quality.

Manufacturing Capacity

The maximum volume of products a manufacturing facility can produce over a given period of time under normal working conditions.