high low method machine hours

The Hunter Company uses the high-low method to estimate the cost function. Following past monthly cost and activity information is available.

High Low Method Calculate Variable Cost Per Unit And Fixed Cost

Course Title ACC 211.

. High Low Method Accounting Meaning Formula Example And More In 2021 Accounting Accounting Principles Accounting Education. Get Your Custom Essay on High-low method to analyze cost behavior Just from 13Page Order Essay A. The companys cost and machine hour usage data for the first six months of the year follow.

Month Direct Labor Hours Maintenance Cost January 1700 14300. The organization increments salaries and wages by 10 at the start of the 3rd. The high-low method involves taking the.

Month January February Utes. The companys relevant range of activity varies from a low of 600 machine hours to a high of 1100 machine hours with the following data being available for the first six months of the year. This preview shows page 21 - 25 out of 55 pages.

The high-low method of cost accounting is a way of trying to distinguish fixed and variable costs provided a limited amount of data. High Low Method of Machine Hours 8000 10000 11000 9000 14000 12000 Total Maintenance Costs 600000 640000 800000 700000 900000 870000 Required. High low method 1 machine hours maintenance costs.

View high low methoddocx from BSMA 401 at STI College multiple campuses. Atlanta Inc which uses the high-low method to analyze cost behavior has determined that machine hours best explain the companys utilities cost. The cost of electricity was 18000 in the month when its highest activity was 120000 machine hours MHs.

Solve Y if x 13000 machine hours. Using the high-low method develop an estimate of fixed electricity costs per month. X Company uses the high-low method to estimate total overhead costs each month with machine hours as the activity measure.

HIGH-LOW METHOD Key Terms and Concepts to Know Variable Fixed and Mixed Costs. School The University of Queensland. A company incurred 12000 of maintenance cost for 6500 machine hours in June and 14250 of maintenance costs for 8000 hours in August.

Using the high-low method develop an estimate of variable electricity costs per machine hour. Quarter Work hours Cost 1 15000 4000000 2 20000 4800000 3 18000 4400000 4 21000 5000000. Dont use plagiarized sources.

High low method machine hours Saturday March 5 2022 Edit. Assuming these are the high and low months of activity the estimated fixed maintenance costs using the high-low method is _____. Plant activity is best measured by direct labor hours.

Pages 55 Ratings 100 3 3 out of 3 people found this document helpful. Machine Hours Electrical Cost January 4000 3120 February 6000 4460 March 4800 3500. Barkoff Enterprises which uses the high-low method to analyze cost behavior has determined that machine hours best explain the companys utilities cost.

Factory overheadMachine hours. Find the fixed cost 3. The company observed that at 20000 machine hours of activity total maintenance costs averaged 3290 per hour.

The Month Cost Machine Hours May 8646 2650 June 11157 4000 July 11808 4350 August 10785 3800 If machine hours in October are expected to be. Use the high-low method to estimate the fixed and variable portion of overhead costs based on machine hours. High Low Method is a mathematical technique used to determine the fixed and variable elements of historical costs that are partially fixed and partially variable.

Month Maintenance Cost Machine Hours. Estimate electricity costs for a month in which 3000 machine hours are. Quarter Work hours Cost 1.

State the cost function 4. This method can be used advantageously. When activity jumped to 26000 machine hours which was still within the relevant range the average total cost per machine hour was 2690.

If the plant is planning to operate at a level of 300 machine hours next period what would be the estimated overhead costs. Although the high-low method is straightforward to use its seldom used because it can distort costs because of its reliance on two extreme values from a given data set. Be sure to use the MHs that occurred between the meter reading dates appearing on the bill The cost of electricity was 16000 in the.

Use High and low method to estimate Variable cost per unit 2. Lets begin by determining the formula that is used to calculate the variable cost slope. The high-low method involves taking.

High Low Method is a mathematical technique used to determine the fixed and variable elements of historical costs that are partially fixed and partially variable. Business Accounting QA Library Using the high-low method the utilities cost associated with 980 machine 1 point hours would be. Use the method of least square to estimate the fixed and variable portion of overhead costs based on.

Using the high-low method develop a cost function for monthly electricity costs. If factory overhead is Rs 3 00000 and total machine hours are 1500 the machine hour rate is Rs 200 per machine hour Rs 3 00000 1500 hours. In the given question the high cost is 3600 and the low cost is 2700 whereas the high machine hour is 18000 and low machine hour is 10000.

The following data being avalable for the first six months of the year. High Low Method In Accounting Definition Formula. Uses the high-low method to analyze cost behavior.

The companys relevant range of activity varies from a low of 600 machine hours to a high of 1200 machine hours with the following data being available for the first six months of the year. Machine Hours 9000 3000 6000 Highest Lowest Difference Utility.

High Low Method Calculate Variable Cost Per Unit And Fixed Cost