I have already asked this question previously and the answer was incorrect and m

Question

I have already asked this question previously and the answer was incorrect and made no sense! Please help.

Alden Co.’s monthly sales and cost data for its operating activities of the past year follow. Management wants to use these data to predict future fixed and variable costs.

   

Alden Co.’s monthly sales and cost data for its operating activities of the past year follow. Management wants to use these data to predict future fixed and variable costs.

Required infomation 10.00 points You did not reccive full credit for this question in a previous attempt Problem 21-2A Part 3 3. Predict future total oosts when sales volume is a) 3a8,C00 and (b) $428,000 d Contribution Margin Income Statement 10000%IS 388,000|$ 428,000 Contribution margn 388.000 428,000 S 388,000 28,000 Total costs 00 tPR 11:06AM

Explanation / Answer

We can use the high low method to calculate the fixed and variable cost.

For sales = 75800, total cost = 64000

For sales = 359000, total cost = 270736

The variable cost = (270736-64000)/(359000-75800)

= 0.73

Fixed costs = 64000 - 0.73*75800 = 8666

A) Total cost for 388000 units = 8666+0.73*388000

= 291906

B) Total cost for 428000 units = 8666+0.73*428000

= 321106

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

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