Question
In: Accounting
Fremont, which uses the high-low method, reported total costs of $10.40 per unit at its lowest...
Fremont, which uses the high-low method, reported total costs of $10.40 per unit at its lowest production level, 5,000 units. When production tripled to its highest level, the total cost per unit dropped to $6.40. Fremont would estimate its total fixed cost as:
$6.40
$30,000
$52,000
$16.80
Solutions
Expert Solution
Answer-
Total cost on low activity = 5,000*10 .40 = 52,000
Total cost on high activity = 15,000*6.40 = 96,000
Variable cost per unit = (96,000-52,000)/(15,000-5,000) = 4.40per unit
Fixed cost = 96,000-(15,000*4.40) = 30,000
So answer is b) $30,000
ekkarill92 answered 2 years agoRelated Solutions
Cypress, which uses the high-low method, had an average cost per unit of $5 at its...
Cypress, which uses the high-low method, had an average cost per
unit of $5 at its lowest level of activity when sales equaled
10,000 units and an average cost per unit of $3.25 at its highest
level of activity when sales equaled 24,000 units. Cypress would
estimate fixed costs as:
Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost.
The manufacturing costs of Ackerman Industries for the first three months of the year follow:ParticularsTotal costUnits producedJanuary$1,900,00020,000 unitsFebruary2,250,00027,000March2,400,00030,000Using the high low method,Determine (a) the variable cost per unit and (b) the total fixed cost
In applying the high-low method of cost estimation to mixed costs, how is the total fixed...
In applying the high-low method of cost estimation to mixed
costs, how is the total fixed cost estimated?
If fixed costs increase, what would be the impact on the (a)
contribution margin? (b) income from operations?
An examination of the accounting records of Clowney Company
disclosed a high contribution margin ratio and production at a
level below maximum capacity. Based on this information, suggest a
likely means of improving income from operations. Explain.
QUESTION ONE: MIXED COSTS WITH THE HIGH-LOW METHOD Addy Whyte Limited has estimated its total factory...
QUESTION ONE: MIXED COSTS WITH THE HIGH-LOW
METHOD
Addy Whyte Limited has estimated its total factory overhead
costs at both minimum and maximum levels of production for the next
period as given below:
Minimum level of production 185,000 machine hours
Maximum level of production 250,000 machine hours
The total factory overhead, made up of variable costs, mixed
costs and fixed costs, was estimated as $1,231,000 for 250,000
machine hours and $1,068,500 for 185,000 machine hours. At the
minimum production level...
High-low method Ziegler Inc. has decided to use the high-low method to estimate the total cost...
High-low method
Ziegler Inc. has decided to use the high-low method to estimate
the total cost and the fixed and variable cost components of the
total cost. The data for various levels of production are as
follows:
Units Produced
Total Costs
104,500
$30,703,250
119,500
33,380,750
136,500
36,415,250
This information has been collected in the Microsoft Excel
Online file. Open the spreadsheet, perform the required analysis,
and input your answers in the questions below.
Determine the variable cost per unit and...
Assume a merchandising company uses the high-low method to separate any mixed costs into their variable...
Assume a merchandising company uses the high-low method to
separate any mixed costs into their variable and fixed elements. It
provided the following income statements:
May
June
July
Sales in units
4,800
5,000
5,500
Sales
$
168,000
$
175,000
$
192,500
Cost of goods sold
86,400
90,000
99,000
Gross margin
81,600
85,000
93,500
Selling and administrative expenses:
Advertising
17,000
17,000
17,000
Shipping
16,800
17,500
19,250
Salaries and commissions
29,600
30,000
31,000
Total selling and administrative expenses
63,400
64,500
67,250
Net...
Pearson Electric Company uses the high-low method to analyze mixed costs. The following information relates to...
Pearson Electric Company uses the high-low method to analyze
mixed costs. The following information relates to the production
data for the first six months of the year.
Month
Cost(Y)
Hours(H)
January
$
8,220
365
February
$
10,000
800
March
$
8,240
480
April
$
8,360
400
May
$
10,380
1,085
June
$
9,750
775
How should the cost function be properly stated using the
high-low method?
rev: 10_11_2019_QC_CS-185082
Multiple Choice
Y = $6,630 + $2.00H.
Y = $7,125 + $3.00H....
Pearson Electric Company uses the high-low method to analyze mixed costs. The following information relates to...
Pearson Electric Company uses the high-low method to analyze
mixed costs. The following information relates to the production
data for the first six months of the year.
Month
Cost(Y)
Hours(H)
January
$
8,050
335
February
$
9,750
780
March
$
8,040
460
April
$
8,110
380
May
$
10,210
1,055
June
$
9,510
755
What is the estimated total cost at an operating level of 1,180
hours, using the high-low method? (Round variable cost per
unit to 2 decimal places.)
High–Low Method; Predicting Cost Prince Company’s total overhead costs at various levels of activity are presented...
High–Low Method; Predicting Cost
Prince Company’s total overhead costs at various levels of activity
are presented below:
labour overhead
Month Hours Cost
September . . . . . . . . . . . . . . . . . . 100,000
$388,000
October . . . . . . . . . . . . . . . . . . . . . 80,000
$340,400
November . . . . . . ....
Klein Company distributes a high-quality bird feeder that sells for $40 per unit. Variable costs are $14 per unit, and fixed costs total $182,000 annually.
Klein Company distributes a high-quality bird feeder that sells
for $40 per unit. Variable costs are $14 per unit, and fixed costs
total $182,000 annually.Required:Answer the following independent questions:1. What is the product’s CM ratio?2. Use the CM ratio to determine the break-even
point in sales dollars.3. The company estimates that sales will
increase by $68,000 during the coming year due to increased demand.
By how much should operating income increase?4. Assume that the operating results for last
year were...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- A company orders every 8 weeks. 52 weeks/8 weeks per order = 6.5 orders per year....
- Soto Inc. had the following utility cost with the related activity levels for the previous months....
- What is covariation between two variables? How is "covariation" (or correlation) between two variables different from...
- Question 1: What is For Loop? Explain with 2 Examples. You can write code in any...
- If a corporation has limited capital to use for project investment, but it has more projects...
- I have a problem with my code. It does not run. Please can someone check the...
- As discussed in the text, in the absence of market imperfections and tax effects, we would...
ADVERTISEMENT