Ginsburg and Company has provided you with the following data: Month Supervision...
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Accounting
Ginsburg and Company has provided you with the following data:
Month
Supervision Cost
Labor Hours
Machine Hours
January
$27,500
2,400
5,040
February
28,500
2,560
5,300
March
32,540
3,360
6,600
April
30,000
2,880
6,500
May
32,630
3,300
6,750
Required:
a) Use the high-low method to estimate Ginsburg's monthly fixed supervision cost and the unit variable cost of supervision as a function of labor hours (i.e. use labor hours as the measure of activity). Estimate the supervision cost for the month of June if the expected number of labor hours and machine hours for the month of June are 4,000 and 6,000 respectively.
b) Use the high-low method to estimate Ginsburg's monthly fixed supervision cost and the unit variable cost of supervision as a function of machine hours (i.e. use machine hours as the measure of activity). Estimate the supervision cost for the month of June if the expected number of labor hours and machine hours for the month of June are 4,000 and 6,000 respectively.
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