Reference no: EM132466236

X Company's accountant has collected the following cost and activity information from the past two months to help her develop a cost function that she could use to predict costs in July. Production in July is expected to be 10,200 units:

Month            Overhead Cost              Units Produced

May               $30,890                       7,100

June               $37,850                      9,500

Question 1:  Assume the accountant used account analysis and data from May to develop the cost function. She collected the following additional May information: cost of supplies was $15,060, all variable, cost of utilities was $5,900, 70% variable, and cost of rent was $9,930, all fixed. Using the resulting cost function, what would be the estimate of total overhead costs in July?

Question 2: Assume the accountant used the high-low method to develop the cost function with the original May and June information (ignore Question 1 information). Using the resulting cost function, what would be the estimate of fixed overhead costs in July?

Question 3:  Using the high-low method cost function, what would be the estimate of variable overhead costs per unit in July?