Problem
Wasderf Limited is a capital-intensive business that manufactures scuba tanks. Financial information for
Wasderf Limited is a capital-intensive business that manufactures scuba tanks. Financial information for the last six months ending December 2019 reveals the following:
|
Month
|
Scuba tanks sold
|
Production overheads
($ thousands)
|
|
July
|
120
|
34
|
|
August
|
100
|
31.3
|
|
September
|
120
|
36
|
|
October
|
140
|
37.4
|
|
November
|
180
|
46.1
|
|
December
|
160
|
43.7
|
Question I
Use the high-low method to estimate the variable production overhead cost per scuba tank.
Question II
Estimate the fixed production overhead cost.
Question III
Estimate the total production overheads for January if the company expects sales of 210 scuba tanks in that month.