high low method machine hours

The high-low method comprises the highest and the lowest level of activity and comparison of the. High Low Method of Machine Hours 8000 10000 11000 9000 14000 12000 Total Maintenance Costs 600000 640000 800000 700000 900000 870000 Required.

Cost Behavior Analysis Analyzing Costs And Activities Example

Use High and low.

. This method can be used advantageously. Pages 55 Ratings 100 3 3 out of 3 people found this document helpful. The formula for the calculation of variable cost and fixed cost Variable Cost And Fixed Cost A fixed cost is a constant expense that is independent of the number of units produced such as rent payable salaries payable and other utilities payable.

Variable cost refers to the cost that vary with production such as direct material direct labour and so on. Example of High-Low Method. High Low Method of Machine Hours 8000 10000 11000 9000 14000 12000 Total Maintenance Costs 600000 640000 800000 700000 900000 870000 Required.

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. Read more under the high-low. Using the high-low method of analysis estimate the variable electrical cost per machine hour.

Find the fixed cost 3. Period Semi-Variable Costs Machine Hours 1 100000 22000 2 120000 30000 3 96000 23600 If 29000 machine hours were budgeted for the next period estimated semi-variable costs would total. Solve Y if x 13000 machine hours.

A manufacturing company estimates semi-variable costs by using the high-low method with machine hours as the cost driver. The high low method is a simple technique for computing the variable cost rate and the total amount of fixed coststhat are part of mixed costs mixed costs are costs. Multiple Choice 52150 51725.

3 Total cost on 1220 Machine hour will be 1220161740 3692. Variable utilities cost per machine hour 16 per machine hour. 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.

The organization increments salaries and wages by 10 at the start of the 3rd. Machine hours and electricity costs for IJMAC Industries for 2013 were as follows. Part 1 High-Low Method 12 Points.

Course Title ACC 211. High-Low method is one of the several mathematical techniques used in managerial accounting to split a mixed cost into its fixed and variable components. High low analysis of maintenance cost Machine Hours Machine Cost High activity from FINANCE 1 at Handelshøyskolen BI.

State the cost function 4. Recent data are shown below. Recent data are shown below.

Variable utilities cost per machine hour Change in costhigh machine hour-low machine hour 4076-33881460-1030. Solve Y if x 13000 machine hours. Use High and low method to estimate Variable cost per unit 2.

Given a set of data pairs of activity levels ie. These are then used to. Quarter Work hours Cost 1 15000 4000000 2 20000 4800000 3 18000 4400000 4 21000 5000000.

Use High and low method to estimate Variable cost per unit 2. This preview shows page 21 - 25 out of 55 pages. Solve Y if x 13000 machine hours.

The Cost function will be. 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 1 machine hours maintenance costs.

Factory overheadMachine hours. The following information was gathered for the past year Busiest month June Slowest month December Machine Hours 18000 6000 Direct Labor Costs 285000 129000 What are the direct labor costs per machine hour. 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.

A manufacturing company estimates semi-variable costs by using the high-low method with machine hours as the cost driver. Transfer the information in the table above to an Excel spreadsheet and prepare the solutions to the following questions. The organization increments salaries and wages by 10 at the start of the 3rd.

The Macon Company uses the high-low method to determine its cost equation. Find the fixed cost 3. Company which uses the high-low method to analyze cost behavior has determined that machine hours best predict the companys total utilities cost.

2 Fixed cost Total cost-variable cost 3388-103016 Fixed cost 1740. Assume that the cost of electricity at a small manufacturing facility is a mixed cost since the company has only one electricity meter for air quality cooling lighting and for its production equipment. Using the high-low method develop an estimate of fixed electricity costs per month.

Using the high-low method answer the following questions. Labor hours machine hours etc and the corresponding total cost figures high-low method only takes two extreme data pairs as inputs. 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.

Your solution should show the appropriate formulas and the detailed calculations. State the cost function 4. School The University of Queensland.

Machine Hours Electrical Cost January 4000 3120 February 6000 4460 March 4800 3500 April 5800 5040 May 3600 2900 June 4200 3200 Required. 11000 76000 58000 66000. The companys cost and machine hour usage data for the first six months of the year follow.

The company wants to know the rate at which its electricity cost changes when the number of machine hours change.

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