Cycle Accessories manufacturers cellphone holders that can be mounted on the handle bars of most motorcycles. The manufacturing process is highly automated and management feels that machine-hours are likely the main driver of overhead costs. Data from the most recent year are shown below. Month January February March Overhead Costs $53,300 54,620 Machine-Hours 2,200 2,260 2,500 60,500 April 3,220 65,420 May 3,400 67,710 June 4,000 69,480 July 4,600 75,270 August 5,200 76,640 September 4,900 74,260 October 3,400 67,400 November 2,560 62,190 December 4,600 73,410 Required: 1. Using least-squares regression, estimate the fixed cost and variable cost elements of monthly overhead costs. Estimate the fixed. cost element to the nearest dollar and the variable cost element to the nearest cent. Fixed cost Variable cost per machine hour 2. If the company expects to use 3,700 machine-hours next month, estimate total overhead costs. Total overhead costs

Flash E−Card Manufacturing manufactures software parts for the computer software systems that produce e−cards. The Flash II part is currently manufactured in the Computer Department. The Data Department also produces the part, and the plant has excess capacity to produce the Flash II part. The current market price of the Flash II part is $900. The managerial accountant reported the following manufacturing costs and variable expense​ data: Flash E−Card Manufacturing Manufacturing Costs and Variable Expense Report Flash Component Direct materials $860 Direct labor $110 Variable manufacturing overhead $150 Fixed manufacturing overhead​ (current production​ level) $145 Variable selling expenses​ (only incurred on sales to outside​ consumers) $118 If the highest acceptable transfer price is $900 in the​ market, what is the lowest acceptable in−house price the Data Department should receive to produce the part in−house at the Computer​Department?

Adriana Corporation manufactures football equipment. In planning for next year, the managers want to understand the relation between activity and overhead costs. Discussions with the plant supervisor suggest that overhead seems to vary with labor hours, machine hours, or both. The following data were collected from last year’s operations.   Month               Labor-Hours                Machine-Hours                   Overhead costs    1                             720                              1,355                                   $  102,644    2                             720                              1,411                                        103,842    3                             675                              1,527                                        109,938    4                             750                                1,462                                        108,297   5                              785                              1,582…

Adriana Corporation manufactures football equipment. In planning for next year, the managers want to understand the relation between activity and overhead costs. Discussions with the plant supervisor suggest that overhead seems to vary with labor-hours, machine-hours, or both. The following data were collected from last year's operations.    Month Labor-Hours Machine-Hours Overhead Costs 1   725     1,349   $ 102,630   2   720     1,404     103,742   3   685     1,517     109,818   4   750     1,459     108,368   5   770     1,589     116,290   6   745     1,583     114,521   7   735     1,396     107,079   8   720     1,307     102,082   9   715     1,463     106,471   10   790     1,538     113,065   11   675     1,298     103,776   12   720     1,608     116,796       Required: a. Use the high-low method to estimate the fixed and variable portions of overhead costs based on machine-hours. b. Managers expect the plant to operate at a monthly average…

Mema Company makes motorcycles. Management wants to estimate overhead costs to plan its operations. A recent trade publication revealed that overhead costs tend to vary with machine hours. To check this, they collected the following data for the past 12 months. (See the picture for the table) Compute for the: 1. If the plant is planning to operate at a level of 200 machine hours next period, what would be the estimated overhead costs?

MTI makes three types of lawn tractors: M3100, M4100, and M6100. In the past, it allocated overhead to products using machine-hours. Last year, the company produced 10,000 units of M3100, 17,500 units of M4100, and 10,000 units of M6100 and had the following revenues and costs: MTI Income Statement M3100 M4 100 M6100 Total Sales revenue. Direct costs Direct materials .. Direct labor $9,000,000 $15,000,000 $13,500,000 $37,500,000 3,000,000 600,000 4,500,000 900,000 3,300,000 10,800,000 1,800,000 3,300,000 Variable overhead Setting up machines. Processing sales orders... Warehousing ..... Operating machines Shipping .. Contribution margin. Plant administration 2,400,000 1,800,000 2,400,000 1,200,000 900,000 $14,700,000 Gross profit..... 6,000,000 $ 8,700,000 MTI's controller has heard about activity-based costing and puts together an employee team to recommend cost allocation bases. The employee team recommends the following: Activity Cost Driver M3100 M4100 M6100 Setting up machines....…

Ethan Manufacturing Inc. produces floor mats for automobiles. The owner, Joseph Ethan, has asked you to assist in estimating maintenance costs. Together, you and Joseph determine that the single best cost driver for maintenance costs is machine hours. These data are from the previous fiscal year for maintenance costs and machine hours: Month 1 2345 67 000 8 9 10 11 12 Maintenance Costs $ 2,740 2,900 3,050 3,160 3,240 3,210 3,150 2,990 2,760 2,360 2,370 2,590 Machine Hours 1,830 1,910 1,990 2,010 2,040 2,020 2,000 1,980 1,840 Required 1 Required 2 1,240 1,440 1,730 Required: 1. What is the cost equation for maintenance costs using the high-low method? 2. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1. Complete this question by entering your answers in the tabs below. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1. (Do not round intermediate calculations, with the exception…

Fountain Water Products (FWP) manufacturers water bottles. They have historically used a traditional system that allocated the manufacturing overhead costs based on machine hours. FWP is looking at switching to an ABC system in order to ensure more accurate product costing. They first want to compare the traditional and ABC costing systems to determine if it is worth the effort and costs to implement and maintain.   They estimate a total overhead cost of $459,000. Under the traditional system they identified machine hours as the cost driver, and estimated a total of 51,000 machine hours. They actually incurred 48,700 machine hours in production. The total applied MOH calculated under the more precise ABC system was $320,000. The ABC costing system will cost $50,000 to implement. FWP has determined that a benefit of more accurate costing by $80,000 is worth the $50,000 implementation cost. What is the difference between the ABC costing and traditional system? Enter your number as a…

SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = $520,475 + $1.49X, where X equals number of smokers. Last year, SmokeCity produced 19,100 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity?   For questions 2-4, Enter the final answers rounded to the nearest dollar. 2. What is the total overhead cost incurred by SmokeCity last year? $fill in the blank 2 3. What is the total fixed overhead cost incurred by SmokeCity last year? $fill in the blank 3 4. What is the total variable overhead cost incurred by SmokeCity last year? $fill in the blank 4 For questions 5-7, round your answers to the nearest cent. Use those rounded figures in subsequent computations, if necessary. 5. What is the overhead cost per unit produced? $fill in the blank 5 per unit 6. What is the fixed overhead cost…

Ryan Corporation manufactures auto steering systems. Prime cost and machine time estimates for one unit of the product for the year follow: Direct materials Direct labor ($29/hour) Machine hours $ 370 $ 725 20 This product requires 15 hours of direct labor in Department A and 10 hours in Department B. Also, it requires 5 machine hours in Department A and 15 machine hours in Department B. Using output as the activity, the factory overhead costs estimated in these two departments follow: Variable cost Fixed cost A B $ 405,000 $250,000 111,000 180,000 Management expects the firm to produce 1,000 units during the year. Required: 1. Assume the total actual overhead base used was equal to the estimated base for the 1,000 units produced. Assume that factory overhead was applied on the basis of direct labor hours. Compute the predetermined plantwide factory overhead rate. 2. If factory overhead were applied on the basis of machine hours, what would be the plantwide overhead rate? 3. If the…