Question

In: Accounting

Relevant Range and High-Low Method The following selected data relate to the major cost categories experienced...

Relevant Range and High-Low Method The following selected data relate to the major cost categories experienced by Shaw Company at varying levels of operating volumes. Assuming that all operating volumes are within the relevant range, calculate the appropriate costs in each column in which blanks appear: Total Cost (@ 3,000 Units) Total Cost (@ 4,000 units) Variable Cost per Unit Total Fixed Cost Total Cost (@ 5,000 units) Direct labor (variable) $57,000 $76,000 $Answer $Answer $Answer Factory supervision (semi-variable) 50,000 65,000 $Answer $Answer $Answer Factory depreciation (fixed) 27,000 27,000 $Answer $Answer $Answer

Solutions

Expert Solution

  • All working forms part of the answer
  • Requirement, as asked

Total Cost (@ 3,000 Units)

Total Cost (@ 4,000 units)

Variable Cost per Unit

Total Fixed Cost

Total Cost (@ 5,000 units)

Direct labor (variable)

$                57,000

$               76,000

$                       19 [(57000/3000) or (76000/4000)]

$                        -  

$              95,000 [5000 x $19]

Factory supervision (semi-variable)

$                50,000

$               65,000

$                       15 [see working below]

$                 5,000 [see working below]

$              80,000 [$5000 + (5000 units x $15]

Factory depreciation (fixed)

$                27,000

$               27,000

$                        -  

$               27,000

$              27,000

--Working for Factory Supervision

Units

Cost

High Level

                            4,000

$                   65,000.00

Low Level

                            3,000

$                   50,000.00

Difference

                            1,000

$                   15,000.00

Difference in Cost

$                                                             15,000.00

Difference in units

                                                                        1,000

Variable cost per unit

$                                                                     15.00 [15000 / 1000]

Working

High Level

Low Level

A

Total Cost

$                 65,000.00

$                   50,000.00

B

Total Units

4000

3000

C

Variable cost per unit

$                         15.00

$                           15.00

D = B x C

Total Variable cost

$                 60,000.00

$                   45,000.00

E = A - D

Total Fixed Cost

$                   5,000.00

$                    5,000.00


Related Solutions

Relevant Range and High-Low Method The following selected data relate to the major cost categories experienced...
Relevant Range and High-Low Method The following selected data relate to the major cost categories experienced by Shaw Company at varying levels of operating volumes. Assuming that all operating volumes are within the relevant range, calculate the appropriate costs in each column in which blanks appear: Total Cost (@ 3,000 Units) Total Cost (@ 4,000 units) Variable Cost per Unit Total Fixed Cost Total Cost (@ 5,000 units) Direct labor (variable) $51,000 $68,000 Answer Answer Answer Factory supervision (semi-variable) 50,000...
Question text Relevant Range and High-Low Method The following selected data relate to the major cost...
Question text Relevant Range and High-Low Method The following selected data relate to the major cost categories experienced by Shaw Company at varying levels of operating volumes. Assuming that all operating volumes are within the relevant range, calculate the appropriate costs in each column in which blanks appear: Total Cost (@ 3,000 Units) Total Cost (@ 4,000 units) Variable Cost per Unit Total Fixed Cost Total Cost (@ 5,000 units) Direct labor (variable) $72,000 $96,000 Answer Correct Mark 1.00 out...
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 $30,703,250 119,500 33,380,750 136,500 36,415,250 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Determine the variable cost per unit and...
Question One High-Low Method, High—Low Method, Cost Formulas (LO 3) During the past year, the high...
Question One High-Low Method, High—Low Method, Cost Formulas (LO 3) During the past year, the high and low use of three different resources for Wilson Trucking occurred in July and April. The resources are truck depreciation, fuel, and truck maintenance. The number of kilometres travelled is the driver. The total costs of the three resources and the related number of truck kilometres are as follows: Resource                              Truck Kilometres      Total Cost ($) Truck depreciation: High                                                   46,000,000   2,800,000 Low                                                    32,400,000   2,800,000 Fuel:...
Define the two major categories of quality cost and how they relate to each other.
Define the two major categories of quality cost and how they relate to each other.
High-Low Method, Cost Formulas During the past year, the high and low use of three different...
High-Low Method, Cost Formulas During the past year, the high and low use of three different resources for Fly High Airlines occurred in July and April. The resources are airplane depreciation, fuel, and airplane maintenance. The number of airplane flight hours is the driver. The total costs of the three resources and the related number of airplane flight hours are as follows: Resource Airplane Flight Hours Total Cost Airplane depreciation: High 44,000 $ 18,400,000 Low 28,000 $ 18,400,000 Fuel: High...
High-Low Method, Cost Formulas During the past year, the high and low use of three different...
High-Low Method, Cost Formulas During the past year, the high and low use of three different resources for Fly High Airlines occurred in July and April. The resources are airplane depreciation, fuel, and airplane maintenance. The number of airplane flight hours is the driver. The total costs of the three resources and the related number of airplane flight hours are as follows: Resource Airplane Flight Hours Total Cost Airplane depreciation: High 44,000 $ 18,000,000 Low 28,000 $ 18,000,000 Fuel: High...
35) The following data has been assembled for John Company. Use the high-low method. Month                   Cost        &nb
35) The following data has been assembled for John Company. Use the high-low method. Month                   Cost               Hours January             $24,400                2,000 February            $39,000                2,200 March               $35,280                2,750 April                 $36,400                3,500 May                  $40,000                4,000 The expected total cost at an operating level of 1,900 hours is ________. A) $23,180 B) $23,620 C) $24,000 D) $24,400
I want to talk about the relevant range is the range :Relevant range::Cost behaviorrelevant range:of the...
I want to talk about the relevant range is the range :Relevant range::Cost behaviorrelevant range:of the volume of activity where total fixed costs remain constant and the variable cost per unit remains constant. Can someone provide an example?
Give a numerical example of cost function method the high-low method  and analyze this cost function? Discuss...
Give a numerical example of cost function method the high-low method  and analyze this cost function? Discuss how is this cost function used in decision making?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT