Tessmer Manufacturing Company Produces Inventory in a Highly Automated Assembly

question 38

Essay

Tessmer Manufacturing Company produces inventory in a highly automated assembly plant in Olathe,Kansas.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:
$\begin{array}{lrrr}&\text { Machine-hours}&\text { Kilowatt-hours }&\text {Total Overhead Costs }\\\text { January } & 4,560 & 5,424,000 & \$ 405,600 \\\text { February } & 4,380 & 5,208,000 & 404,160 \\\text { March } & 4,680 & 5,400,000 & 407,040 \\\text { April } & 3,960 & 5,148,000 & 404,160 \\\text { May } & 3,900 & 5,040,000 & 391,200 \\\text { June } & 3,720 & 4,944,000 & 384,000\end{array}$ 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 4,000 hours and used 4,550,000 kilowatt-hours of power.The overhead costs totaled $365,000.Which cost driver was the best predictor for July?

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Y Chromosome

The sex chromosome typically associated with male characteristics in humans and many other species.

X Chromosome

One of the two sex chromosomes, X chromosome is a vital part of the genetic makeup that plays a crucial role in determining gender and other genetic traits.

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