1.00 points M58 Estimating Cost Behavior Using High-Low Method [LO 53] Shes Tan-

ID: 2343349 • Letter: 1

Question

1.00 points M58 Estimating Cost Behavior Using High-Low Method [LO 53] Shes Tan-O-Rama is a local tanning salon. The following information reflects its number of appointments and total costs for the st half of the year Total Appointments Cost 6,950 5,650 5,550 6,450 6,400 6,050 Number o Month anuary February March Apri May June 325 Using the high-low method, calculate the total fixed cost per month and the variable cast per tanning appointment (Round your Variable Cost per Unit" answer to 2 decimal places and "Fixed Cost" answer to the nearest dollar amount.) arinhlr Cost per nit Fixed Cost

Explanation / Answer

variable cost per unit

(highest total cost-lowest total cost) / (highest no of appointment-lowest no of appointment)

(6950-5550) / (350-175)

total cost equation

Y = a +bX y = total cost a = fixed cost b= variable cost x= no of units

6950 = a + (8*350)

a = 6950- 350*8

4150