Short Answer I. Given the following data, use the high/low method to determine t

Question

Short Answer I. Given the following data, use the high/low method to determine the variable cost per inspection and the fixed costs. Prepare the budget oquation Month March April May Junc Number of Inspections Overhead Costs $3,420 3,555 3,989 4,044 4,101 6t 76 Meredith takes her daughter with her on all inspections and pays her $40 per inspection. Due to slower business in the cooler months, Meredith estimates she will average 60 inspections per month for the next six months Prepare a schedule showing Meredith 's estimated total cost per inspection.

Explanation / Answer

Under high/low method,We choose high & low activity and cost associated with it Inspection Cost August 110 4120 March 60 3420 Inremental 50 700 Variable cost per inspection=700/50 14 Fixed cost=3420- 14*60 2580 Equation =14x+2580 Total cost for 60 inspection 3420 Cost per inspection 57

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