2. Given the following cost and activity observations for Accounting Company’s p
ID: 2517775 • Letter: 2
Question
2. Given the following cost and activity observations for Accounting Company’s production machine, use the high-low method to calculate the answers to the questions below related to Accounting Company. Round variable Cost per unit UP to the nearest dollar.
?
Cost
Units
January
$50,000
25,000
February
81,000
32,000
March
59,000
30,000
April
90,000
45,000
a. What is the variable cost per unit?
b. What are the fixed costs for this data set?
c. What is the estimated total cost for 30,000 units?
?
?
Cost
Units
January
$50,000
25,000
February
81,000
32,000
March
59,000
30,000
April
90,000
45,000
Explanation / Answer
Variable cost per unit=[Total cost at highest level-Total cost at lowest level]/(Highest level-Lowest level)
=(90000-50000)/(45000-25000)=$2 per unit
Fixed costs=90000-(2*45000)=$0.
Estimated total costs=Variable costs+Fixed costs
=0+(2*30000)=$60000.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.