Accounting Chapter 5 2 Given The Following Information Compute The

39. Given the following information, compute the total number of units for the period:

40. The Shapely Company uses the high-low method to determine its cost equation. The

following information was gathered for the past year:

What are the direct labor costs per machine hour?

41. The Shapely Company uses the high-low method to determine its cost equation. The

following information was gathered for the past year:

If Shapely expects to use 10,000 machine hours next month, what are the estimated direct labor

costs?

42. Hagler’s Toupees has the following machine hours and production costs for the last six

months of last year:

If Hagler expects to incur 14,000 machine hours in January, what will be the estimated total

production cost using the high-low method?

43. The controller of Joy Co has requested a quick estimate of the manufacturing supplies

needed for the Morton Plant for the month of July, when production is expected to be 470,000

units to meet the ending inventory requirements and sales of 475,000 units. Joy Co’s budget

analyst has the following actual data for the last three months.

Using the high-low method to develop a cost estimating equation, the estimate of needed

manufacturing supplies for July would be: (CMA adapted)

44. The Chambers Manufacturing Company recorded overhead costs of $14,182 at an activity

level of 4,200 machine hours and $8,748 at 2,300 machine hours. The records also indicated that

overhead of $9,730 was incurred at 2,600 machine hours. What is the variable cost per machine

hour using the high-low method to estimate the cost equation?

45. The Wiscow Manufacturing Company recorded overhead costs of $14,182 at an activity

level of 4,200 machine hours and $8,748 at 2,300 machine hours. The records also indicated that

overhead of $9,730 was incurred at 2,600 machine hours. What is the total estimated cost for

2,600 machine hours using the high-low method to estimate the cost equation?

46. The cost accountants at the Doering Company regressed total overhead costs and direct

labor hours for the past 30-months and reported the following results:

What is the estimated overhead cost if 225 direct labor hours are expected to be used in the

upcoming period? (rounded to the nearest whole dollar)

5-29

47. The Armer Company is accumulating data to be used in preparing its annual profit plan for

the coming year. The cost behavior pattern of the maintenance costs must be determined. The

accounting staff has suggested that linear regression be employed to derive an equation in the

form of y = a + bx for maintenance costs. Data regarding the maintenance hours and costs for

last year and the results of the regression analysis are as follows: (CMA adapted)

What would be the cost equation if regression analysis is used?

5-30

48. The Armer Company is accumulating data to be used in preparing its annual profit plan for

the coming year. The cost behavior pattern of the maintenance costs must be determined. The

accounting staff has suggested that linear regression be employed to derive an equation in the

form of y = a + bx for maintenance costs. Data regarding the maintenance hours and costs for

last year and the results of the regression analysis are as follows: (CMA adapted)

Based upon the data derived from the regression analysis, 420 maintenance hours in a month

would mean the maintenance costs would be budgeted at: (rounded to the nearest whole dollar)

5-31

49. The Armer Company is accumulating data to be used in preparing its annual profit plan for

the coming year. The cost behavior pattern of the maintenance costs must be determined. The

accounting staff has suggested that linear regression be employed to derive an equation in the

form of y = a + bx for maintenance costs. Data regarding the maintenance hours and costs for

last year and the results of the regression analysis are as follows: (CMA adapted)

What is the variable cost per hour using the high-low method to estimate the cost equation?

5-32

0. The Armer Company is accumulating data to be used in preparing its annual profit plan for

the coming year. The cost behavior pattern of the maintenance costs must be determined. The

accounting staff has suggested that linear regression be employed to derive an equation in the

form of y = a + bx for maintenance costs. Data regarding the maintenance hours and costs for

last year and the results of the regression analysis are as follows: (CMA adapted)

What is the fixed cost per month using the high-low method to estimate the cost equation?

5-34

51. The Armer Company is accumulating data to be used in preparing its annual profit plan for

the coming year. The cost behavior pattern of the maintenance costs must be determined. The

accounting staff has suggested that linear regression be employed to derive an equation in the

form of y = a + bx for maintenance costs. Data regarding the maintenance hours and costs for

last year and the results of the regression analysis are as follows: (CMA adapted)

Using the high-low method to estimate cost behavior, 420 maintenance hours in a month would

mean the maintenance costs would be budgeted at:

5-35

52. The Armer Company is accumulating data to be used in preparing its annual profit plan for

the coming year. The cost behavior pattern of the maintenance costs must be determined. The

accounting staff has suggested that linear regression be employed to derive an equation in the

form of y = a + bx for maintenance costs. Data regarding the maintenance hours and costs for

last year and the results of the regression analysis are as follows: (CMA adapted)

What would be the cost equation if the high-low method is used?

5-37

53. The Business School at Eastern College is accumulating data as a first step in the

preparation of next year’s budget development. One cost that is being looked at closely is

administrative costs as a function of student credit hours. Data on administrative costs and credit

hours for the past thirteen months are shown below:

The controller’s office has analyzed the data and has given you the results from the regression

analysis:

If the controller uses the high-low method to estimate costs, the variable cost per credit hour is:

5-39

54. The Business School at Eastern College is accumulating data as a first step in the

preparation of next year’s budget development. One cost that is being looked at closely is

administrative costs as a function of student credit hours. Data on administrative costs and credit

hours for the past thirteen months are shown below:

The controller’s office has analyzed the data and has given you the results from the regression

analysis:

If the controller uses the high-low method to estimate costs, the fixed cost portion of the cost

equation for administrative salaries is: