Questions:
1. The XYZ Tool Manufacturing Co. shows the following factory overhead costs at various levels of direct labor hours for the last four months:
| |
Direct Labor
|
Factory
|
|
Month
|
Hours x
|
Overhead y
|
|
July
|
2,500 hours
|
$ 7,000
|
|
August
|
1,500
|
5,000
|
|
September
|
2,000
|
6,000
|
|
October
|
3,000
|
8,000
|
| |
9,000 hours
|
$26,000
|
Determine the monthly fixed overhead and the variable overhead rate per direct labor hour (DLH) using (a) the scattergraph method and (b)the high-low method.