A.using the high-low method determine the cost formula for, Ask an Expert

Accounting

The Mallard Company's total overhead costs at various levels of activity are presented below:

Month Direct Labor Hours Total Overhead

September 15,000 $472,000
October 12,000 409,400
November 18,000 542,000
December 21,000 604,700

Assume that the overhead costs above consist of indirect labor, scheduling salaries, and maintenance.

The breakdown of these costs for the month of November is as follows:

Indirect labor (variable cost) $219,600
Maintenance (mixed cost) 197,400
Scheduling salaries (fixed cost) 125,000
Total $542,000

Required:

a. Using the high-low method, determine the cost formula for maintenance.

b. Express the company's TOTAL overhead costs in linear equation form.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M947595

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