High-Low Method Ziegler Inc. has decided to use the high-low method to estimate
ID: 2549044 • Letter: H
Question
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:
a. Determine the variable cost per unit and the total fixed cost.
b. Based on part (a), estimate the total cost for 3,390 units of production.
Sales Mix and Break-Even Sales
Data related to the expected sales of laptops and tablets for Tech Products Inc. for the current year, which is typical of recent years, are as follows:
The estimated fixed costs for the current year are $2,250,000.
Required:
1. Determine the estimated units of sales of the overall (total) product, E, necessary to reach the break-even pointfor the current year.
units
2. Based on the break-even sales (units) in part (1), determine the unit sales of both laptops and tablets for the current year.
3. Assume that the sales mix was 60% laptops and 40% tablets. Compare the breakeven point with that in part (1). Why is it so different?
units
The break-even point is in this scenario than in part (1) because the sales mix is toward the product with the higher of product.
Units Produced Total Costs 2,665 $435,420 4,240 445,100 6,765 677,320Explanation / Answer
a) Determine the variable cost per unit and the total fixed cost.
Variable cost per unit= (677320-435420)/(6765-2665) = 59 per unit
Fixed cost = Total cost-variable cost
= 677320-(6765*59)
Fixed cost = 278185
Total cost = (3390*59+278185) = 478195
Note : As per chegg policy only one question in one time
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