Assignment
Below are the overhead costs and labor hours for Smith & Co.
|
Month
|
Overhead Cost
|
# of labor hours
|
|
January
|
$9,640
|
490
|
|
February
|
$12,680
|
680
|
|
March
|
$11,080
|
580
|
|
April
|
$11,720
|
620
|
|
May
|
$13,000
|
700
|
|
June
|
$10,120
|
520
|
|
July
|
$8,840
|
440
|
|
August
|
$6,600
|
300
|
Required:
Using the high-low method:
1. Calculate the fixed cost of overhead.
2. Calculate the variable rate per labor hour.
3. Construct the cost formula for total overhead cost.
4. The company is estimating that in September the labor hours will be 600. How much should they estimate to have in total overhead cost for September?