The following information is available regarding the total manufacturing overhead of Bursa Mfg. Co. for a recent four-month period:
Machine-
Hours |
|
Manufacturing Overhead |
| Jan. |
5,900 |
$ 300,000 |
| Feb. |
3,200 |
224,000 |
| Mar. |
4,900 |
263,800 |
| Apr. |
3,000 |
190,000 |
a-1. Use the high-low method to determine the variable element of manufacturing overhead costs per machine-hour. (Round your answer to 2 decimal places.)
a-2. Use the high-low method to determine the fixed element of monthly overhead cost.
b. Bursa expects machine-hours in May to equal 5,300. Use the cost relationships determined in part ato forecast May's manufacturing overhead costs.
c. Suppose Bursa had used the cost relationships determined in part a to estimate the total manufacturing overhead expected for the months of February and March. By what amounts would Bursa have over- or underestimated these costs?