What is the fixed component of overhead manufacturing costs

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Question - Sony manufacturing produces and sells DVD players. The selling price for a DVD player is $840. Direct material is $280 per each DVE. The company pay $20 per direct labor hour and each unit requires 2.5 direct labor hours. Total overhead costs for the past 12 months are as follows:

Month

Machine Hours

Manufacturing Overhead Cost ($)

January

115

107,670

February

215

137,990

March

205

124,570

April

220

126,500

May

245

137,650

June

140

112,400

July

160

120,650

August

125

108,200

September

110

117,400

October

135

114,200

November

155

116,700

December

140

115,760

Required -

1. Using the high-low method, what is the variable cost per machine hours?

2. What is the fixed component of overhead manufacturing costs?

3. Write overhead cost function and revenue functions based on your answer in question #1, #2, and information given.

4. The company use 1200 machine hours to produce 1500 DVDs. Given all information the above, write a cost function of for DVD and draw a graph to show the breakeven point.

Reference no: EM132255754

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