Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Actual total overhead costs Linear approximation Actual minus linear approximation
€340,000 357,000
€(17,000)
€400,000 400,000
€ 0
€435,000 443,000
€ (8,000)
€477,000 486,000
€ (9,000)
€529,000 529,000
€ 0
€587,000 572,000
€ 5,000 Professional labour-hours
3,000 000 4,000 5,000 0000 6,000 0000 7,000 0000 8,000 The data are shown in Solution Exhibit 9.15. The linear cost function overstates costs by €8,000 at the hour level and understates costs by €15,000 at the hour level.
Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5 th Edition, Instructor’s Manual © Pearson Education Limited 2012 3Based on Based on linear Actual Cost function Contribution before deducting incremental overhead €38,000 €38,000 Incremental overhead 35,000 43,000 Contribution after incremental overhead € 3,000 €(5,000) Share with your friends: |
