To differentiate the variable and fixed costs in the use of this machine for fut

Question

To differentiate the variable and fixed costs in the use of this machine for future planning, use the high-low method to do the following:

a. Determine the variable cost per copy. Round your answer to two decimal places.
$per copy

b. Compute the fixed and variable costs for the months of February and June.

Month Variable Costs Fixed Costs February $ $ June $ $ The following are monthly totals taken from the log of a color photocopying machine used by the Kinlo's Printing Company. Cost was based on a flat fee plus a declining cost per copy made after a minimum number of copies had been made each month. The following are monthly totals taken from the lo To differentiate the variable and fixed costs in the use of this machine for future planning, use the high-low method to do the following: a. Determine the variable cost per copy. Round your answer to two decimal places. $per copy b. Compute the fixed and variable costs for the months of February and June. Month Variable Costs Fixed Costs February $ $ June

Explanation / Answer

a) Month of June is high, and February is low.

(14,225 – 9,600) / (48,900 – 30,400) = 4,625 / 18,500 = $0.25 per copy

b) Month Variable Costs Fixed Costs

February (.25*30400)=$7600 9600-7600 = $2000

June (.25*48900)=$12225 14225-12225 =$2000

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