Managerial Accounting Question- On McGraw Hill Connect?

Posted on 2014-04-04 11:15:00 in Economics by APL

Golden Company’s total overhead cost at various levels of activity are presented below:



Month Machine-Hours Total Overhead Cost

March 50,000 $194,000

April 40,000 $170,200

May 60,000 $217,800

June 70,000 $241,600



Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 40,000 machine-hour level of activity is as follows:





Utilities (variable) $ 52,000

Supervisory salaries (fixed) 60,000

Maintenance (mixed) 58,200



Total overhead cost $ 170,200





The company wants to break down the maintenance cost into its variable and fixed cost elements.



Required:

1.



Estimate how much of the $241,600 of overhead cost in June was maintenance cost. (Hint: To do this, it may be helpful to first determine how much of the $241,600 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs within the relevant range.) (Do not round intermediate calculations. Omit the "$" sign in your response.)

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