Anderson Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product.
Production volume 4,000 units 5,000 units
Direct materials 99.20 per unit 99.20 per unit
Direct labor 45.50 per unit 45.50 per unit
Manufacturing overhead 94.00 per unit 77.60 per unit
The best estimate of the total monthly fixed manufacturing cost is:
We first find the equation for manufacturing overhead using the ...
The solution explains the use of high low method to calculate the fixed manufacturing cost.