29 Jun Question Part 1 High-Low Method (12 Points). Page 2
Question
Part 1 High-Low Method (12 Points). Page 2
Machine hours and electricity costs for IJMAC Industries for 2013 were as follows:
Required: Transfer the information in the table above to an Excel spreadsheet and prepare the solutions to the following questions. Your solution should show the appropriate formulas and the detailed calculations. In using Excel, you should use appropriate formulas and functions to show your understanding of basic Excel functions. Clearly identify your answer to each question.
Month Machine Hours Electricity Costs January 2,000 $ 12,000 February 2,320 10,500 March 1,560 6,650 April 2,480 11,500 May 3,040 14,125 June 2,640 11,000 July 3,280 12,375 August 2,800 11,375 September 1,600 6,700 October 2,960 13,000 November 3,760 15,450 December 3,700 15,400
a.
A. Using the high-low method, develop an estimate of variable electricity costs per machine hour. B. Using the high-low method, develop an estimate of fixed electricity costs per month. C. Using the high-low method, develop a cost function for monthly electricity costs. D. Estimate electricity costs for a month in which 3,000 machine hours are worked. Month Machine Hours Electricity Costs January 2,000 $ 12,000 February 2,320 10,500 March 1,560 6,650 April 2,480 11,500 May 3,040 14,125 June 2,640 11,000 July 3,280 12,375 August 2,800 11,375 September 1,600 6,700 October 2,960 13,000 November 3,760 15,450 December 3,700 15,400 a. A. Using the high-low method, develop an estimate of variable electricity costs per machine hour. B. Using the high-low method, develop an estimate of fixed electricity costs per month. C. Using the high-low method, develop a cost function for monthly electricity costs.
Page 3 Part 2. Job order costing Reed Incorporated uses a job-order costing system and a predetermined overhead rate based on machine hours. At the beginning of the year, the company estimated manufacturing overhead for the year would be $240,000 and machine hours would be 8,000. The following information pertains to December of the current year
Actual manufacturing overhead cost incurred in December was $61,000. Jobs 10 and 12 were completed during December. Job 10 was sold to customer (see c below).
Required: Transfer the information in the table above to an Excel spreadsheet and prepare the solutions to the following questions. Your solution should show the appropriate formulas and the detailed calculations. In using Excel, you should use appropriate formulas and functions to show your understanding of basic Excel functions. Clearly identify your answer to each question.
a. Compute the predetermined overhead application rate.
b. Determine the total cost associated with each job.
c. Jobs 10 and 12 were completed during the month. If job 10 was delivered to customers that paid $50,000 cash, what is the gross profit for job 10?
d. What is the cost assigned to ending work in process?
e. What is the cost assigned to ending finished goods? f. How much was overhead o. Page 2
Machine hours and electricity costs for IJMAC Industries for 2013 were as follows:
Required: Transfer the information in the table above to an Excel spreadsheet and prepare the solutions to the following questions. Your solution should show the appropriate formulas and the detailed calculations. In using Excel, you should use appropriate formulas and functions to show your understanding of basic Excel functions. Clearly identify your answer to each question.
Month Machine Hours Electricity Costs January 2,000 $ 12,000 February 2,320 10,500 March 1,560 6,650 April 2,480 11,500 May 3,040 14,125 June 2,640 11,000 July 3,280 12,375 August 2,800 11,375 September 1,600 6,700 October 2,960 13,000 November 3,760 15,450 December 3,700 15,400
a.
A. Using the high-low method, develop an estimate of variable electricity costs per machine hour. B. Using the high-low method, develop an estimate of fixed electricity costs per month. C. Using the high-low method, develop a cost function for monthly electricity costs. D. Estimate electricity costs for a month in which 3,000 machine hours are worked. Month Machine Hours Electricity Costs January 2,000 $ 12,000 February 2,320 10,500 March 1,560 6,650 April 2,480 11,500 May 3,040 14,125 June 2,640 11,000 July 3,280 12,375 August 2,800 11,375 September 1,600 6,700 October 2,960 13,000 November 3,760 15,450 December 3,700 15,400 a. A. Using the high-low method, develop an estimate of variable electricity costs per machine hour. B. Using the high-low method, develop an estimate of fixed electricity costs per month. C. Using the high-low method, develop a cost function for monthly electricity costs.
Page 3 Part 2. Job order costing Reed Incorporated uses a job-order costing system and a predetermined overhead rate based on machine hours. At the beginning of the year, the company estimated manufacturing overhead for the year would be $240,000 and machine hours would be 8,000. The following information pertains to December of the current year
Actual manufacturing overhead cost incurred in December was $61,000. Jobs 10 and 12 were completed during December. Job 10 was sold to customer (see c below).
Required: Transfer the information in the table above to an Excel spreadsheet and prepare the solutions to the following questions. Your solution should show the appropriate formulas and the detailed calculations. In using Excel, you should use appropriate formulas and functions to show your understanding of basic Excel functions. Clearly identify your answer to each question.
a. Compute the predetermined overhead application rate.
b. Determine the total cost associated with each job.
c. Jobs 10 and 12 were completed during the month. If job 10 was delivered to customers that paid $50,000 cash, what is the gross profit for job 10?
d. What is the cost assigned to ending work in process?
e. What is the cost assigned to ending finished goods? f. How much was overhead o
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