The following information is available regarding the total manufacturing overhead of Bursa Mfg. Co. for a recent four-month period: Machine-Hours Manufacturing Overhead Jan. 5,800 $ 300,000 Feb. 3,200 224,000 Mar. 4,900 263,800 Apr. 2,900 190,000 a-1 Use the high-low method to determine the variable element of manufacturing overhead costs per machine-hour. Manufacturing overhead cost $ per machine hour a-2 Use the high-low method to determine the fixed element of monthly overhead cost.
If we were using unrounded numbers on a standard problem, the fixed element could be obtained by using either the 'high' or the 'low' figures.Fixed element of manufacturing overhead $ b. Bursa expects machine-hours in May to equal 5,300. Use the cost relationships determined in part a to forecast May's manufacturing overhead costs.Estimated manufacturing overhead $ c. Suppose Bursa had used the cost relationships determined in part a to estimate the total manufacturing overhead expected for the months of February and March. By what amounts would Bursa have over- or underestimated these costs? Amount over (under) estimated February $ March $