InstaChat Industries uses the high-low method to estimate variable costs and fixed costs. Given the following, calculate the variable cost per unit using the high-low method: Total cost # of units January $ 8,300 15,000 February $10, 600 20,000 March $ 6,600 12,000 April $ 9,500 18,000

InstaChat Industries uses the high-low method to estimate variable costs and fixed costs. Given the following, calculate the variable cost per unit using the high-low method: Total cost # of units January $ 8,300 15,000 February $10, 600 20,000 March $ 6,600 12,000 April $ 9,500 18,000

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...

See similar textbooks

Related questions

Q: Current liabilities Convertible bonds ($1,000 par, 7%) Common stock ($1 par, 100,000 shares issued)…

A: Earnings per Share (EPS) is a financial metric that represents the portion of a company's profit…

Q: Question Content Area The following information was taken from Slater Company's balance sheet:…

A: The objective of the question is to calculate two financial ratios for Slater Company: (a) the ratio…

Q: 20. On October 1, 2021, Emma Company issued, 800 of its 7 percent, 7 year $1,000 bonds at an issue…

A: The bonds are issued at premium when market rate is lower than the coupon rate of bonds payable. The…

Q: [The following information Project Y requires a $316,500 investment for new machinery with a…

A: Annual net cash flow = Net income + DepreciationNet present value is computed as present value of…

Q: (a) What is the cash payback period for this proposal? (Round answer to 2 decimal places, e.g.…

A: Cash payback period represents the time period in which our initial investment will be paid back by…

Q: LU08.1: Determining Cost of Land On-Time Delivery Company acquired an adjacent lot to construct a…

A: At the time of recording or capitalising fixed assets, purchase costs along with all costs that are…

Q: Lush Lawn, Incorporated produces and sells electric lawn trimmers for $150 each. The variable costs…

A: Break-even point is the sales level at which a company covers its total costs, with no profit or…

Q: Chaz Corporation has taxable income in 2022 of $312,000 for purposes of computing the §179 expense…

A: Depreciation is an accounting method which is used to spread the cost of the asset over its useful…

Q: Required: Compute the variable overhead spending variances for lubricants and for supplies.…

A: The main purpose of Standard costing is to compare your actual performance with these standards and…

Q: Required Information [The following information applies to the questions displayed below.] The…

A: Stockholder's Equity includes the amount contributed by shareholders in the form of common stock,…

Q: y entries The payrol register for D. Salah Company for the week ended May 18 indicated the…

A: Journal entries are made to record the transactions as the first process in the books of accounts…

Q: The price earnings ratios for 4 public companies are: 5.2, 4.6, 3.4, 4.86. The after-tax…

A: The after-tax capitalization rate, expressed as a percentage, represents the expected return on an…

Q: Delta Company produces a single product. The cost of producing and selling a single unit of this…

A: Decision making is a process of choosing one alternative from various alternatives to get highest…

Q: (2) Compute total asset turnover for the current year and one year ago. Current Year: 1 Year Ago:…

A: · Ratio analysis used to identify the business performance of the company.· It is used to measure…

Q: In 2025, Oriole Corporation began selling a new line of products that carry a two-year warranty…

A: The warranty expenses are estimated in the basis of past year expenses related to expenditures…

Q: Following are the issuances of stock transactions. 1. A corporation Issued 2,000 shares of $20 par…

A: JOURNAL ENTRIESJournal Entry is the First stage of Accounting Process. Journal Entry is the Process…

Q: XYZ Corporation has one asset worth $450,000. Accumulated Depreciation to date is $190,000 and…

A: The concept of deferred income tax liability or asset arises from the temporary differences between…

Q: Generally, how will a suspended loss attributable to a passive activity that is transferred by…

A: When a taxpayer dies, the treatment of suspended losses attributable to a passive activity depends…

Q: What is the present value?

A: Present value means the present worth of the money to be received or paid in the future…

Q: Vulcan Flyovers offers scenic overflights of Mount Saint Helens, the volcano in Washington State…

A: Revenue and spending variance = Actual results - Flexible budget amountsActivity variance = Flexible…

Q: What is the most profitable mix of Blue and Red for this company?

A: Since production hours are the constraint resource for Color Inc. we must decide the sales mix based…

Q: What is the increase in her taxes as a result of the three sales?

A: Capital gains taxes are a type of tax on the profits earned from the sale of assets such as stocks,…

Q: Simcoe Hotel currently launders all of its towels and sheets in the basement of the hotel. The…

A: The estimate of an asset's value at the end of its useful life is known as salvage value. It is used…

Q: 32400 shares authorized; 21600 shares issued Common stock, $10 par value, 3130000 shares authorized;…

A: Total paid-in capital is a part of the stockholder's equity. Under this section capital stock and…

Q: calculate what the breakeven value of sales w

A: The breakeven point is a point at which total cost is equal to total revenue.At this point there is…

Q: year. Sage year-end is December 31. On April 1, 2023, Sage sold the patent to another company. (a)…

A: Patents are the intangible nature of assets which plays a vital role to build business. They are…

Q: Nick’s Novelties, Incorporated, is considering the purchase of new electronic games to place in its…

A: A financial figure called the simple rate of return is used to assess an investment's profitability…

Q: Riverbed Corporation purchased 400 shares of Sherman Inc. common stock for $12,900 (Riverbed does…

A: Accounting for investment is done to know the impact of investment income or expenditure on overall…

Q: The comparative balance sheets of OrioleClothiers are as follows: Cash Accounts receivable Inventory…

A: Comparative financial statements are used to compare two or more years to understand the financial…

Q: Martinez Company expects to produce 1,152.000 units of Product XX in 2022. Monthly production is…

A: The costs incurred for the production are classified as the fixed and variable costs. The fixed…

Q: Concord Corporation has 48,000 shares of $10 par value common stock outstanding. It declares a 12%…

A: Stock Dividend: It implies the distribution of dividends to the company's shareholders in the form…

Q: During 2022, Raymond purchased and placed in service a building for his auto repair business. The…

A: Depreciable basis can be defined as the depreciable value of the asset over its useful life.…

Q: Mission Company is preparing its annual profit plan. As part of its analysis of the profitability of…

A: Overheads are the expenses incurred during the production process and they are not directly related…

Q: The management of Unter Corporation, an architectural design firm, is considering an investment with…

A: The payback period is a financial metric used to assess the amount of time it takes for an…

Q: In November 2023, Kortney (who is a self-employed management consultant) travels from Chicago to…

A: Deduction means reducing the taxable income by a specific amount that is allowed under the income…

Q: The standard cost card for a single unit of Robinson, Incorporated's products is shown below. Direct…

A: Direct materials variance refers to the difference between the actual cost incurred for materials…

Q: Required: a. Prepare a variance analysis for each variable cost for each product. b. Prepare a fixed…

A: Variance analysis is the identification and analysis of the difference between the actual…

Q: ry department ewelry department etics department osmetics department s worked Hours 49 Numerator…

A: Cost allocated is the method of allocating indirect cost to products and services by fairly…

Q: The array of pay rates in different jobs within one organization isThe array of pay rates in…

A: Organization's job pay hierarchy refers to the structured arrangement of pay levels for different…

Q: Admire County Bank agrees to lend Bonita Brick Company $609000 on January 1. Bonita Brick Company…

A: The journal entries are prepared to record the transactions on regular basis. The adjustment entries…

Q: A comparative balance sheet and income statement is shown for Cruz, Incorporated CRUZ, INCORPORATED…

A: The cash flow statement is prepared to record the cash flow from various activities during the…

Q: Timberly Construction makes a lump - sum purchase of several assets on January 1 at a tota cash…

A: The journal entries are prepared to record the transactions on regular basis. The depreciation…

Q: Salmone Company reported the following purchases and sales of its only product. Salmone uses a…

A: The question is related to Inventory. Under FIFO the Inventory received first will be issued first.

Q: Required Information [The following information applies to the questions displayed below.] The…

A: DividendA dividend stands for the amount distributed by the entity to its shareholders out of…

Q: Diaz Company had the following comparative balance sheet information at the end of Year 2 and Year…

A: Cash flow from Financing activities: It include transactions relating to the debt, equity, and…

Q: Assets Cash Accounts receivable Inventory Equipment Accumulated depreciation-equipment Land Total…

A: The cash flow statement using indirect method is prepared as below: Statement of cash flows for…

Q: Varriano Corporation bases its budgets on the activity measure customers served. During October, the…

A: The activity variance is the difference between the flexible budget and planning budget. The…

Q: What is the normal due date for the return of a single taxpayer who is not self- employed? O April…

A: A tax return is a document filed with a tax authority that reports income, expenses, and other…

Q: From the following information, calculate the payroll tax expense for New Company for the payroll of…

A: Answer:- Payroll taxes:- All taxes pertaining to a person's salary, wage, bonus, commission and tips…

Q: Cash equivalents include short-term investments that will be converted to cash within 120 days. True…

A: Cash equivalent is one of liquid asset being held in business. It means assets which can be…

Question

InstaChat Industries uses the high-low method to estimate variable costs and fixed
costs. Given the following, calculate the variable cost per unit using the high-low
method: Total cost # of units January $ 8,300 15,000 February $10,600 20,000 March $
6,600 12,000 April $ 9,500 18,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: High low method:

VIEW

Step 2: Computation of the Variable cost per unit and Total fixed cost:

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Grand Canyon Manufacturing Inc. produces and sells a product with a price of 100 per unit. The following cost data have been prepared for its estimated upper and lower limits of activity: Overhead: Selling and administrative expenses: Required: 1. Classify each cost element as either variable, fixed, or semi-variable. (Hint: Recall that variable expenses must go up in direct proportion to changes in the volume of activity.) 2. Calculate the break-even point in units and dollars. (Hint: First use the high-low method illustrated in Chapter 4 to separate costs into their fixed and variable components.) 3. Prepare a break-even chart. 4. Prepare a contribution income statement, similar in format to the statement appearing on page 540, assuming sales of 5,000 units. 5. Recompute the break-even point in units, assuming that variable costs increase by 20% and fixed costs are reduced by 50,000.
Baxter Company has a relevant range of production between 15,000 and 30,000 units. The following cost data represents average variable costs per unit for 25,000 units of production. Using the costs data from Rose Company, answer the following questions: A. If 15,000 units are produced, what is the variable cost per unit? B. If 28,000 units are produced, what is the variable cost per unit? C. If 21,000 units are produced, what are the total variable costs? D. If 29,000 units are produced, what are the total variable costs? E. If 17,000 units are produced, what are the total manufacturing overhead costs incurred? F. If 23,000 units are produced, what are the total manufacturing overhead costs incurred? G. If 30,000 units are produced, what are the per unit manufacturing overhead costs incurred? H. If 15,000 units are produced, what are the per unit manufacturing overhead costs incurred?
Describe the cost formula for a strictly variable cost such as electrical power cost of 1.15 per machine hour (i.e., every hour the machinery is run, electrical power cost goes up by 1.15).
Rose Company has a relevant range of production between 10,000 and 25.000 units. The following cost data represents average cost per unit for 15,000 units of production. Using the cost data from Rose Company, answer the following questions: If 10,000 units are produced, what is the variable cost per unit? If 18,000 units are produced, what is the variable cost per unit? If 21,000 units are produced, what are the total variable costs? If 11,000 units are produced, what are the total variable costs? If 19,000 units are produced, what are the total manufacturing overhead costs incurred? If 23,000 units are produced, what are the total manufacturing overhead costs incurred? If 19,000 units are produced, what are the per unit manufacturing overhead costs incurred? If 25,000 units are produced, what are the per unit manufacturing overhead costs incurred?
Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for a Time Period That Differs from the Data Period Refer to the information for Pizza Vesuvio on the previous page. Assume that this information was used to construct the following formula for monthly labor cost. TotalLaborCost=5,237+(7.40EmployeeHours) Required: Assume that 4,000 employee hours are budgeted for the coming year. Use the total labor cost formula to make the following calculations: 1. Calculate total variable labor cost for the year. 2. Calculate total fixed labor cost for the year. 3. Calculate total labor cost for the coming year. Use the following information for Brief Exercises 3-17 through 3-20: Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected:
Suppose that a company has fixed costs of $18 per unit and variable costs $9 per unit when 15,000 units are produced. What are the fixed costs per unit when 12,000 units are produced?
Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is 6. Total fixed cost is 10,000. Required: 1. Prepare a CVP graph with Units Sold as the horizontal axis and Dollars as the vertical axis. Label the break-even point on the horizontal axis. 2. Prepare CVP graphs for each of the following independent scenarios: (a) Fixed cost increases by 5,000, (b) Unit variable cost increases to 7, (c) Unit selling price increases to 12, and (d) Fixed cost increases by 5,000 and unit variable cost is 7.
Total costs for ABC Distributing are $250,000 when the activity level is 10,000 units. If variable costs are $5 per unit, what are their fixed costs? $240,000 $200,000 $260,000 Their fixed costs cannot be determined from the information presented.
Analyzing Income under Absorption and Variable Costing Variable manufacturing costs are $101 per unit, and fixed manufacturing costs are $128,700. Sales are estimated to be 7,800 units. If an amount is zero, enter "0". Round intermediate calculations to the nearest cent and your final answers to the nearest dollar. a. How much would absorption costing operating income differ between a plan to produce 7,800 units and a plan to produce 9,900 units? b. How much would variable costing operating income differ between the two production plans? $ 0
Analyzing Income under Absorption and Variable Costing Variable manufacturing costs are $86 per unit, and fixed manufacturing costs are $193,200. Sales are estimated to be 6,900 units. If an amount is zero, enter "0". Round intermediate calculations to the nearest cent and your final answers to the nearest dollar. a. How much would absorption costing operating income differ between a plan to produce 6,900 units and a plan to produce 9,200 units? X b. How much would variable costing operating income differ between the two production plans? ✓
Analyzing Income under Absorption and Variable Costing Variable manufacturing costs are $85 per unit, and fixed manufacturing costs are $125,400. Sales are estimated to be 5,500 units. If an amount is zero, enter "0". Round intermediate calculations to the nearest cent and your final answers to the nearest dollar. a. How much would absorption costing operating income differ between a plan to produce 5,500 units and a plan to produce 6,600 units? b. How much would variable costing operating income differ between the two production plans? Feedback
Analyzing Income under Absorption and Variable Costing Variable manufacturing costs are $99 per unit, and fixed manufacturing costs are $215,600. Sales are estimated to be 7,700 units. If an amount is zero, enter "0". Round intermediate calculations to the nearest cent and your final answers to the nearest dollar. a. How much would absorption costing operating income differ between a plan to produce 7,700 units ard a plan to produce 9,800 units? b. How much would variable costing operating income differ between the two production plans? 0 Feedback Check My Work a. Remember that under variable costing, regardless of whether 7,700 units or 9,800 units are manufactured, no fixed manufacturing costs are allocated to the units manufactured. Instead, all fixed manufacturing costs are treated as a period expense. Therefore the change in units times the per unit fixed costs for the greater production level is the difference in income between the two costing methods. b. Remember that since all…