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Category > Accounting Posted 19 Aug 2017 My Price 7.00

Gordon Company

Exercise 3-37 Identifying the Parts of the Cost Formula; Calculating Monthly, Quarterly, and Yearly Costs Using a Cost Formula Based on Monthly Data

Gordon Company’s controller, Eric Junior, estimated the following formula, based on monthly data, for overhead cost:

Overhead Cost ¼ $150,000 þ ($52 3 Direct Labor Hours)

Required:

1.       Link each term in column A to the corresponding term in column B.

 

Column A                                           Column B

 

Overhead cost                           Fixed cost (intercept)

$150,000                                   Dependent variable

$52                                            Independent variable

Direct labor hours                     Variable rate (slope)

 

2.       If next month’s budgeted direct labor hours equal 8,000, what is the budgeted overhead cost?

3.       If next quarter’s budgeted direct labor hours equal 23,000, what is the budgeted overhead cost?

4.       If next year’s budgeted direct labor hours equal 99,000, what is the budgeted overhead cost?

 

Answers

Maurice Tutor
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Status NEW Posted 19 Aug 2017 01:08 PM My Price 7.00

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