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
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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
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The resources are truck depreciation,
fuel, and truck maintenance.
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Shum Manufacturing, which uses the high-low method, makes a
product called Kwan. The company incurs three different cost types
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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
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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
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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...
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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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45
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$
77
6,500
units
16
30
15
61
If Shum produces 7,000 units,...
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