Machine hours and electricity costs for IJMAC Industries for 2013 were as follows

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Description

Part 1 High-Low
Method (12 Points). Page 2

Machine hours and
electricity costs for IJMAC Industries for 2013 were as follows:

Required: Transfer the information in the table above to an
Excel spreadsheet and prepare the solutions to the following questions. Your
solution should show the appropriate formulas and the detailed calculations. In
using Excel, you should use appropriate formulas and functions to show your
understanding of basic Excel functions. Clearly identify your answer to each
question.

Month Machine
Hours Electricity Costs January
2,000 $ 12,000 February
2,320 10,500 March
1,560 6,650 April
2,480 11,500 May
3,040 14,125 June
2,640 11,000 July
3,280 12,375 August
2,800 11,375 September
1,600 6,700 October
2,960 13,000 November
3,760 15,450 December
3,700 15,400

a.

A. Using the high-low method, develop an estimate of
variable electricity costs per machine hour. B. Using the high-low method, develop an
estimate of fixed electricity costs per month. C. Using the high-low method, develop
a cost function for monthly electricity costs. D. Estimate electricity costs for a month
in which 3,000 machine hours are worked. Month Machine Hours
Electricity Costs January 2,000
$ 12,000 February
2,320 10,500 March
1,560 6,650 April
2,480 11,500 May
3,040 14,125 June
2,640 11,000 July
3,280 12,375 August
2,800 11,375 September
1,600 6,700 October
2,960 13,000 November
3,760 15,450 December
3,700 15,400 a. A.
Using the high-low method, develop an estimate of variable electricity costs
per machine hour. B. Using the
high-low method, develop an estimate of fixed electricity costs per month. C. Using the high-low method, develop
a cost function for monthly electricity costs.

Page
3 Part 2. Job order costing Reed Incorporated uses a job-order
costing system and a predetermined overhead rate based on machine hours. At the beginning of the year, the
company estimated manufacturing overhead for the year would be $240,000 and
machine hours would be 8,000. The
following information pertains to December of the current year

Actual manufacturing overhead cost incurred in December was
$61,000. Jobs 10 and 12 were completed
during December. Job 10 was sold to customer (see c below).

Required: Transfer
the information in the table above to an Excel spreadsheet and prepare the
solutions to the following questions. Your solution should show the appropriate
formulas and the detailed calculations. In using Excel, you should use
appropriate formulas and functions to show your understanding of basic Excel
functions. Clearly identify your answer to each question.

a. Compute the predetermined overhead application rate.

b. Determine the
total cost associated with each job.

c. Jobs 10 and 12 were completed during the month. If job 10
was delivered to customers that paid $50,000 cash, what is the gross profit for
job 10?

d. What is the cost assigned to ending work in process?

e. What is the cost
assigned to ending finished goods? f.
How much was overhead over/under applied?

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