Alden Co.’s monthly sales and cost data for its operating activities of the past

Question

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

Change in cost = Highest point cost - Lowest point cost = 270736 - 64000 = 206736
Change in volume = Highest sales - Lowest sales = 359000 - 75800 = 283200
Variable costs per sales = 206736/283200 = $0.73

Lowest cost point = Fixed costs + ( Variable cost * Corresponding sales)
64000 = Fixed cost + (0.73*75800)
Fixed costs = $8666

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

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