As Part of His Job as Cost Analyst,Max Thompson Collected

question 128

Essay

As part of his job as cost analyst,Max Thompson collected the following information concerning the operations of the Machining Department:
$$\begin{array} { l c c } \text { Observation } & \text { Machine-hours } & \text { Total Operating Costs } \\\text { January } & 4000 & \$ 45000 \\\text { February } & 4600 & 49500 \\\text { March } & 3800 & 45750 \\\text { April } & 4400 & 48000 \\\text { May } & 4500 & 49800\end{array}$$
Required:
a.Use the high-low method to determine the estimating cost function with machine-hours as the cost driver.
b.If June's estimated machine-hours total 4200,what are the total estimated costs of the Machining Department?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

---

Definitions:

Equity Financing

Raising capital through the sale of shares in a company, resulting in new shareholders and diluting the ownership stake of existing shareholders.

Notes Payable

written promissory notes in which the writer agrees to pay a certain amount of money, at a future date or on demand, to the holder of the note.

Revaluation Accounting

A method under International Financial Reporting Standards (IFRS) that allows an entity to adjust the book value of its assets and liabilities to their fair value.

Tangible Assets

Physical assets that have a form you can touch or handle, like buildings, machinery, and land.