Answer Happy

Exercise 20.2 (Algo) High-Low Method of Cost Analysis (LO20-1, LO20-9) The following information is available regarding the total manufacturing overhead of Bursa Mfg. Co. for a recent four-month period. Machine- Hours Manufacturing Overhead 5,000 January February March $300,000 224,000 3,200 4,900 263,800 April 2,800 190,000 a-1. Use the high-low method to determine the variable element of manufacturing overhead costs per machine-hour. (Round your answer to 2 decimal places.). a-2. Use the high-low method to determine the fixed element of monthly overhead cost. (Round "Manufacturing overhead cost" to 2 decimal places.) b. Bursa expects machine-hours in May to equal 5,300. Use the cost relationships determined in part a to forecast May's manufacturing overhead costs. (Round "Manufacturing overhead cost" to 2 decimal places.) c. Suppose Bursa had used the cost relationships determined in part a to estimate the total manufacturing overhead expected for the months of February and March. By what amounts would Bursa have over- or underestimated these costs? (Round "Manufacturing overhead cost" to 2 decimal places.) a-1. Manufacturing overhead cost $ 50.00 per machine hour 50,000 a-2. Fixed element of monthly overhead cost Estimated manufacturing overhead cost 210,000 b. Amount C February March $ $ Under estimated Over estimated $ $ 16,400 18,600