high low method machine hours

Manufacturing overhead applied at 225 of direct labor cost. The High-low method is used in Accounting to separate fixes.

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High Low Method In Accounting Definition Formula It is shown below.

. Atlanta Inc which uses the high-low method to analyze cost behavior has determined that machine hours best explain the companys utilities cost. Use High and low method to estimate Variable cost per unit 2. Variable cost element from the historical cost that is a mixture of both fixed and variable cost and with the use of the high low formula per unit variable cost is measured by subtracting the cost of lowest activity from the cost of the highest activity and dividing the resultant.

Machine-Hours Maintenance Costs Highest observation of cost driver 140000 280000 Lowest observation of cost driver 95000 190000 Difference 45000 90000 Maintenance costs a b Machine-hours Slope coefficient b 90000 45000 2 per machine-hour Constant a 280000 2 140000 280000 280000 0 or. Using the high-low method develop an estimate of fixed electricity costs per month. High Low Method is a mathematical technique used to determine the fixed and variable elements of historical costs that are partially fixed and partially variable.

The Hunter Company uses the high-low method to estimate the cost function. Estimate electricity costs for a month in which 3000 machine hours are. The companys relevant range of activity varies from a low of 600 machine hours to a high of 1200 machine hours with the following data being available for the first six months of the year.

A manufacturing company estimates semi-variable costs by using the high-low method with machine hours as the cost driver. Solve Y if x 13000 machine hours. 1500000 Estimated machine hours.

The following product costs are available for Kellee Company on the production of eyeglass frames. Quarter Work hours Cost 1. Using the high-low method develop a cost function for monthly electricity costs.

The Month Cost Machine Hours May 8646 2650 June 11157 4000 July 11808 4350 August 10785 3800 If machine hours in October are expected to be. Business Accounting QA Library Using the high-low method the utilities cost associated with 980 machine 1 point hours would be. 60000 Budgeted direct labor expense.

Period Semi-Variable Costs Machine Hours 1 100000 22000 2 120000 30000 3 96000 23600 If 29000 machine hours were budgeted for the. Following past monthly cost and activity information is available. Using the high-low method develop an estimate of variable electricity costs per machine hour.

Month Maintenance Cost Machine Hours. Recent data are shown below. State the cost function 4.

Hotlanta Inc which uses the high-low method to analyze cost behavior has determined that machine hours best explain the companys utilities cost. Find the fixed cost 3. Assume that the cost of electricity at a small manufacturing facility is a mixed cost since the company has only one electricity meter for air quality cooling lighting and for its production equipment.

View high low methoddocx from BSMA 401 at STI College multiple campuses. Barkoff Enterprises which uses the high-low method to analyze cost behavior has determined that machine hours best explain the companys utilities cost. The company wants to know the rate at which its electricity cost changes when the number of machine hours change.

Month January February Utes. Example of High-Low Method. Budgeted direct labor hours.

Now the formula for high low method is calculated. X Company uses the high-low method to estimate total overhead costs each month with machine hours as the activity measure. The high-low method involves taking the.

Machine Hours 9000 3000 6000 Highest Lowest Difference Utility Cost 1960 880 1080 a. High Low Method of Machine Hours 8000 10000 11000 9000 14000 12000 Total Maintenance Costs 600000 640000 800000 700000 900000 870000 Required. Period Semi-Variable Costs Machine Hours 1 100000 22000 2 120000 30000 3 96000 23600 If 29000 machine hours were budgeted for the next period estimated semi-variable costs would total A.

Using the high-low method develop an estimate of variable electricity costs per machine hour. The following data being avalable for the first six months of the year. The companys relevant range of activity varies from a low of 600 machine hours to a high of 1100 machine hours with the following data being available for the first six months of the year.

Inventory Turnover Definition