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Question(s) / Instruction(s):

Amfac Company manufactures a single product. The company keeps careful records of manufacturing activities from which the following information has been extracted:

 

                                                                                                                Level of Activity

                                                                                                March−Low        June−High

  Number of units produced                                        10,800                   14,400    

  Cost of goods manufactured                                    $411,400              $558,700    

  Work in process inventory, beginning                   $14,200                   $22,200    

  Work in process inventory, ending                         $25,200                 $15,500    

  Direct materials cost per unit                                    $20                         $20    

  Direct labor cost per unit                                            $8                           $8    

  Manufacturing overhead cost, total                      ?                              ?    

The company\'s manufacturing overhead cost consists of both variable and fixed cost elements. To have data available for planning, management wants to determine how much of the overhead cost is variable with units produced and how much of it is fixed per month.

Required:

1)            For both March and June, estimate the amount of manufacturing overhead cost added to production. The company had no underapplied or overapplied overhead in either month.

2)            Using the high-low method, estimate a cost formula for manufacturing overhead where X represents the number of units produced. 

3)            If 11,300 units are produced during a month, what would be the cost of goods manufactured? 

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