Tanner Inc. has incurred the following overhead costs over a six-week period:
|
Week
|
Machine Hours
|
Overhead Cost
|
|
1
|
119
|
$3,153.50
|
|
2
|
164.5
|
$2,716.25
|
|
3
|
126
|
$2,432.70
|
|
4
|
80.5
|
$1,881.50
|
|
5
|
108.5
|
$2,660.60
|
|
6
|
84
|
$2,557.25
|
1. Using the high-low method, calculate the variable cost component of these overhead costs (round to the nearest two decimal places).
A. $1.98/hr.
B. $9.94/hr.
C. $33.04/hr. D. $ 12.11/hr. E. $ 6.56/hr.
2. Calculate the approximate fixed cost component of Tanner's overhead costs using the high- low method.
A. $ 834.96
B. $ 834.75
C. $ 551.20 D. $1,081.33 E. $ 1,272.33
3. If Tanner expects to have 65 hours of machine time in a future week, what overhead costs could they expect to incur?
A. $ 1,727.48
B. $ 1,880.70
C. $ 2,002.90 D. $ 2,004.98 E. $ 2,031.91
4. The sales level at which a company neither earns a profit nor incurs a loss is the: A. Relevant range.
B. Margin of safety.
C. Step-wise variable level.
D. Break-even point.
E. Contribution margin.