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Total Overhead Cost - Management Accounting

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The production manager has provided you with the following information for varying levels of production:

Volume level in direct labor hours Total overhead cost
30,000 $340,000
40,000 400,000
50,000 435,000
60,000 477,000
70,000 ?
80,000 587,000
90,000 636,400

What is the total overhead cost at 70,000 direct labor hours?

a. $479,233
b. $522,667
c. $530,133
d. $532,000
e. $537,600

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Solution Preview

The answer is 'e'

By using high low method we have,

Variable Cost per ...

Solution Summary

The solution total overhead cost when varying levels of production are given. Management accounting for total overhead costs are provided.

$2.19