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# High Low Method, Predicting cost Goldens company total

### Resolved Question:

High Low Method, Predicting cost
Golden's company total overhead cost at various levels of activity are presented below

Month Machine hours Total Overhead Cost
March 50000 194000
April 40000 170200
May 60000 217800
June 70000 241600

Assume that the overhead cost above consists of: utilities, supervisory salaries, and maintenance. The breakdown of these costs at the \$40,000 machine hour level of activity is as follows:

Utilities (variable) 52000
Supervisory salaries (fixed) 60000
Maintenance (mixed) 58200

The company wants to break down the maintenance cost into its variable and fixed cost elements.

"1. Estimate how much of the 241600 of overhead cost in June was maintenance cost. (Hint: To do this it may be helpful to first consider how much
of the 241600 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs within the relevant range.)"

2. Using the high-low method, estimate a cost formula for maintenance.

3. Express the company's total overhead cost in the form of Y = a + bX

4. What total overhead cost would you expect to be incurred at an activity level of 45,000 machine-hours?
Submitted: 3 years ago.
Category: Homework
Expert:  Linda_us replied 3 years ago.
HiCustomer

Regards

Linda
Customer: replied 3 years ago.
1 or 2 hours max
Expert:  Linda_us replied 3 years ago.
I am working on it. Will post the solution in 30 minutes.

Regards

Linda
Expert:  Linda_us replied 3 years ago.
You can view this answer by clicking here to Register or Login and paying \$3.
Linda_us, Finance, Accounts & Homework Tutor
Category: Homework
Satisfied Customers: 7207
Experience: Post Graduate Diploma in Management (MBA)
Customer: replied 3 years ago.
Thank you Linda. Also if you can share in Excell that would be even better because i could see where you got all the numbers for

Thanks once again
Expert:  Linda_us replied 3 years ago.
Hi Customer

I have already provided every step in the word file. I can upload the solution in excel as well but the content would be same as given in word file.

If you need any explanation on a step or calculation please let me know.

Regards

Linda

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