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    High-Low Method

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    The Rams Company has provided the following information:

    Month Factory Overhead Labor Hours

    July $92,095 4,900

    August 105,056 5,480

    September 83,802 3,760

    October 99,594 4,420

    November 108,694 5,720

    December 97,404 3,980

    a. Using the high-low method, calculate the total fixed factory overhead cost and the variable factory overhead cost per direct labor hour.

    b. Prepare the cost function.

    c. What would the total factory overhead cost be at a level of 8,000 hours?

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    Solution Summary

    The solution provides step by step method for the calculation of total fixed factory overhead cost and the variable factory overhead cost per direct labor hour using high-low method. Formula for the calculation is also included.

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