Youmayuseanindexof 01520 answer job minutes

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Unformatted text preview: ls 168) Patrick of manufacturing overhead costs. Specifically, he wants to know how much overhead cost is fixed and how much is Ross, the variable. The following data are the only records available: president of Ross's Month Machine -hours Overhead Costs Wild February 1,700 $20,500 Game March 2,800 22,250 Company, April 1,000 19,950 has asked May 2,500 21,500 for June 3,500 23,950 informati on about Required: the cost behavior Using the high-low method, determine the overhead cost equation. Use machine-hours as your cost driver. Answer: High: June 3,500 $23,950 Low: April 1,000 19,950 Difference 2,500 4,000 $ Variable cost per MH: $4,000/2,500 = $1.60 per MH Fixed cost: $19,950 = a + $1.60 × 1,000 a = $18,350 Estimated cost equation: y = $18,350 + $1.60 × 1,000 Diff: 2 Terms: high-low method, cost function Objective: 4 AACSB: Analytical skills 169) Harry's Picture manufact ures various picture frames. Each new employee takes 5 hours to make the first picture frame and 4 hours to make the second. The manufacturing overhead charge per hour is $20. Required: a. What is the learning-curve percentage, assuming the cumulative average method? b. What is the time needed to build 8 picture frames by a new employee using the cumulative average -time method? You may use an index of -0.1520. c. What is the time needed to produce the 16th frame by a new employee using the incremental unit-time method? You may use an index of -0.3219. d. How much manufacturing overhead would be charged to the 16 picture frames using the average -time approach? Answer: Job Hours Cumulative Cumulative Average 1 55 5 2 49 4.5 a. Learning percentage = 4.5/5 = 0.90 b. Y = p Xq = 5 × 8-.1520 = 3.65 hours or 1 unit = 5 2 units = 5 × 0.9 = 4.5 4 units = 4.5 × 0.9 = 4.05 8 units = 4.05 × 0.9 = 3.65 hours Time to build 8 units: 8 × 3.65 = 29.2 hours c. Y = p Xq = 5 × 16- 0.3219 = 2.048 hours or 1 unit = 5 2 units = 5 × 0.8 = 4 4 units = 4 × 0.8 = 3.2 8 units = 3.2 × 0.8 = 2.56 16 units = 2.56 × .8 = 2...
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This note was uploaded on 12/12/2012 for the course SB 305 taught by Professor Brown during the Spring '08 term at Clarkson University .

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