Question 28 The following information is available for a company\'s manufacturin

Question

Question 28 The following information is available for a company's manufacturing over the last twelve months: Units Produced 32,250 34,400 34,000 35,100 33,240 28,500 29,000 27.900 24.450 25,300 26,500 27,900 Manufacturing Cost $63,400 $67,000 $66,300 $68,200 $64,200 $59,280 $60,000 $57,800 $52,400 $53,100 $54,560 $55,900 Month January February March May June August September October November December Based on the high-low method, what is the variable and fixed cost component of total manufacturing cost? Variable cost per unit (round your answer to 2 decimal places): $ Fixed cost (round your answer to 2 decimal places if neessary): $

Explanation / Answer

Calculation of Variable and Fixed Component of Total Manufacturing cost

Highest Cost = $68200

Lowest Cost = $52400

Highest Activity = 35100 Units

Lowest Activity = 24450 Units

1) Variable cost Per Unit = ($68200 - $52400)/(35100 - 24450)

= $15800/10650 = $1.48

2) Fixed Cost = Let 'x'

Total Cost = Fixed cost + Variable cost

$68200 = x + ($1.48*35100)

x = $68200 - $51948

x = $16252

Formula = (High Point cost - Low Point cost)/(High Point activity - Low Point Activity)

1) Variable cost Per Unit = ($68200 - $52400)/(35100 - 24450)

= $15800/10650 = $1.48

2) Fixed Cost = Let 'x'

Total Cost = Fixed cost + Variable cost

$68200 = x + ($1.48*35100)

x = $68200 - $51948

x = $16252

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.