In: Accounting
Below are the processing costs of Duraseal Products observed over the last 10 months: Use the high low method to determine the variable cost per unit | |||
and fixed cost per month. Express your results in the form of a linear equation y = a + bx. | |||
Month | Units Produced | Processing Cost | |
1 | 9,900 | 78,000 | |
2 | 9,200 | 66,000 | |
3 | 7,600 | 61,000 | |
4 | 8,800 | 64,000 | |
5 | 9,000 | 65,000 | |
6 | 5,950 | 59,000 | |
7 | 9,300 | 68,000 | |
We assume the linear relation is Y=a + bX | |||
High-Low method | Units Produced | Processing Cost | |
High point | |||
Low point | |||
Slope | Two decimal places | b | |
Intercept: | a | ||
Assume the units level in August is 9600. | 9600 | ||
The process cost will be Y | |||
Two decimal places |