Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method. Alden Company’s monthly data for the past year follow. Management wants to use these data to predict future variable and fixed costs. Month Units Sold Total Cost 1 319,000 $ 156,500 2 164,000 100,250 3 264,000 204,600 4 204,000 99,000 5 289,000 200,500 6 189,000 111,000 7 361,000 285,296 8 269,000 150,750 9 76,200 66,000 10 149,000 129,625 11 93,000 93,000 12 99,000 82,650
Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method. Alden Company’s monthly data for the past year follow. Management wants to use these data to predict future variable and fixed costs. Month Units Sold Total Cost 1 319,000 $ 156,500 2 164,000 100,250 3 264,000 204,600 4 204,000 99,000 5 289,000 200,500 6 189,000 111,000 7 361,000 285,296 8 269,000 150,750 9 76,200 66,000 10 149,000 129,625 11 93,000 93,000 12 99,000 82,650
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 7E: High-low method Ziegler Inc. has decided to use the high-low method to estimate the total cost and...
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1. Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method.
Alden Company’s monthly data for the past year follow. Management wants to use these data to predict future variable and fixed costs.
Month | Units Sold | Total Cost |
---|---|---|
1 | 319,000 | $ 156,500 |
2 | 164,000 | 100,250 |
3 | 264,000 | 204,600 |
4 | 204,000 | 99,000 |
5 | 289,000 | 200,500 |
6 | 189,000 | 111,000 |
7 | 361,000 | 285,296 |
8 | 269,000 | 150,750 |
9 | 76,200 | 66,000 |
10 | 149,000 | 129,625 |
11 | 93,000 | 93,000 |
12 | 99,000 | 82,650 |
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Predict future total costs when sales volume is (a) 378,000 units and (b) 418,000 units.
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