Question
In: Accounting
High-Low Method The manufacturing costs of Ackerman Industries for the first three months of the year...
High-Low Method
The manufacturing costs of Ackerman Industries for the first three months of the year follow:
| Total Costs | Units Produced | |||
| January | $241,920 | 945 | units | |
| February | 278,210 | 2,070 | ||
| March | 376,320 | 3,045 | ||
Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost. Round all answers to the nearest whole dollar.
| a. Variable cost per unit | $ |
| b. Total fixed cost |
Solutions
Expert Solution
| Answer: |
| (a) |
|
Variable cost per unit = (Highest Total Cost (-) lowest Total Cost) / ( Highest Units (-) lowest Units) = ( $ 376,320 (-) $ 241,920 ) / ( 3,045 (-) 945 ) = $ 134,400 / 2,100 = $ 64 Per unit |
| Variable cost per unit = $ 64 Per unit |
| (b) |
|
Fixed cost = Highest Cost
(-) ( Highest Units x Variable cost per unit ) = $ 376,320 (-) ( 3,045 x $ 64) = $ 376,320 (-) $ 194,880 = $ 181,440 |
| Total Fixed cost = $ 181,440 |
ekkarill92 answered 2 years agoRelated Solutions
High-Low Method The manufacturing costs of Ackerman Industries for the first three months of the year...
High-Low Method
The manufacturing costs of Ackerman Industries for the first
three months of the year follow:
Total Costs
Units Produced
January
$465,670
3,260
units
February
319,680
1,850
March
497,280
5,550
Using the high-low method, determine (a) the variable cost per
unit and (b) the total fixed cost. Round all answers to the nearest
whole dollar.
a. Variable cost per unit
$
b. Total fixed cost
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high-low method, determine total fixed costs. $
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Question One
High-Low Method, High—Low
Method, Cost Formulas (LO 3)
During the past year, the high and low
use of three different resources for Wilson Trucking occurred in
July and April.
The resources are truck depreciation,
fuel, and truck maintenance.
The number of kilometres travelled is
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Shum Manufacturing, which uses the high-low method, makes a
product called Kwan. The company incurs three different cost types
(A, B, and C) and has a relevant range of operation between 2,500
units and 7,000 units per month. Per-unit costs at two different
activity levels for each cost type are presented below.
Type A
Type B
Type C
Total
5,000
units
$
23
$
66
$
23
$
112
7,500
units
23
44
22
89
If Shum produces 7,000 units,...
Shum Manufacturing, which uses the high-low method, makes a product called Kwan. The company incurs three...
Shum Manufacturing, which uses the high-low method, makes a
product called Kwan. The company incurs three different cost types
(A, B, and C) and has a relevant range of operation between 2,700
units and 12,000 units per month. Per-unit costs at two different
activity levels for each cost type are presented below.
Type A
Type B
Type C
Total
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units
$
4
$
7
$
5
$
16
8,100
units
5
9
4
18
The cost formula that expresses...
Shum Manufacturing, which uses the high-low method, makes a product called Kwan. The company incurs three...
Shum Manufacturing, which uses the high-low method, makes a
product called Kwan. The company incurs three different cost types
(A, B, and C) and has a relevant range of operation between 2,500
units and 7,000 units per month. Per-unit costs at two different
activity levels for each cost type are presented below.
Type A
Type B
Type C
Total
5,000
units
$
23
$
66
$
23
$
112
7,500
units
23
44
22
89
If Shum produces 7,000 units,...
Shum Manufacturing, which uses the high-low method, makes a product called Kwan. The company incurs three...
Shum Manufacturing, which uses the high-low method, makes a
product called Kwan. The company incurs three different cost types
(A, B, and C) and has a relevant range of operation between 2,000
units and 15,000 units per month. Per-unit costs at two different
activity levels for each cost type are presented below.
Type A
Type B
Type C
Total
4,000
units
$
5
$
8
$
7
$
20
6,000
units
5
7
5
17
The cost formula that expresses...
Shum Manufacturing, which uses the high-low method, makes a product called Kwan. The company incurs three...
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Type C
Total
5,000
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$
45
$
16
$
77
6,500
units
16
30
15
61
If Shum produces 7,000 units,...
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