The table below shows monthly data collected on production costs and on the number of units produced over a twelve month period. Month Total Production Costs Level of Activity (Units Produced) July $230,000 3,500 August 250,000 3,750 September 260,000 3,800 October 220,000 3,400 November 340,000 5,800 December 330,000 5,500 January 200,000 2,900 February 210,000 3,300 March 240,000 3,600 April 380,000 5,900 May 350,000 5,600 June 290,000 5,000 Determine the variable cost per unit and the fixed cost using the high-low method. What is the equation of the total mixed cost function? Based on the High-Low method, what is the total production costs if 6,500 units are produced? Prepare the scatter diagram and insert the trendline or line of best-fit. Use a scale of 2 cm to represent 1,000 units on the x-axis & 2 cm to represent $50,000 on the yaxis. Using the line of best-fit, determine the company’s fixed cost per month and the variable cost per unit. (Use 0 & 5,000 units.) Which of the two methods appear more appropriate? Explain your answer.
The table below shows monthly data collected on production costs and on the number of units produced over a twelve month period. Month Total Production Costs Level of Activity (Units Produced) July $230,000 3,500 August 250,000 3,750 September 260,000 3,800 October 220,000 3,400 November 340,000 5,800 December 330,000 5,500 January 200,000 2,900 February 210,000 3,300 March 240,000 3,600 April 380,000 5,900 May 350,000 5,600 June 290,000 5,000 Determine the variable cost per unit and the fixed cost using the high-low method. What is the equation of the total mixed cost function? Based on the High-Low method, what is the total production costs if 6,500 units are produced? Prepare the scatter diagram and insert the trendline or line of best-fit. Use a scale of 2 cm to represent 1,000 units on the x-axis & 2 cm to represent $50,000 on the yaxis. Using the line of best-fit, determine the company’s fixed cost per month and the variable cost per unit. (Use 0 & 5,000 units.) Which of the two methods appear more appropriate? Explain your answer.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
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Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
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Chapter11: Performance Evaluation And Decentralization
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Problem 23BEB: Use the following information for Brief Exercises 11-23 and 11-24: Theta Company has the following...
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The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Cost Classification Discussion Question
The table below shows monthly data collected on production costs and on the number of units produced over a twelve month period.
|
Month |
Total Production Costs |
Level of Activity (Units Produced) |
|
July |
$230,000 |
3,500 |
|
August |
250,000 |
3,750 |
|
September |
260,000 |
3,800 |
|
October |
220,000 |
3,400 |
|
November |
340,000 |
5,800 |
|
December |
330,000 |
5,500 |
|
January |
200,000 |
2,900 |
|
February |
210,000 |
3,300 |
|
March |
240,000 |
3,600 |
|
April |
380,000 |
5,900 |
|
May |
350,000 |
5,600 |
|
June |
290,000 |
5,000 |
- Determine the variable cost per unit and the fixed cost using the high-low method.
- What is the equation of the total mixed cost function?
- Based on the High-Low method, what is the total production costs if 6,500 units are produced?
- Prepare the scatter diagram and insert the trendline or line of best-fit. Use a scale of 2 cm to represent 1,000 units on the x-axis & 2 cm to represent $50,000 on the yaxis.
- Using the line of best-fit, determine the company’s fixed cost per month and the variable cost per unit. (Use 0 & 5,000 units.)
- Which of the two methods appear more appropriate? Explain your answer.
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- Prepare the scatter diagram and insert the trendline or line of best-fit. Use a scale of 2 cm to represent 1,000 units on the x-axis & 2 cm to represent $50,000 on the yaxis.
- Using the line of best-fit, determine the company’s fixed cost per month and the variable cost per unit. (Use 0 & 5,000 units.)
- Which of the two methods appear more appropriate? Explain your answer.
Solution
by Bartleby ExpertFollow-up Question
It was 6500 units for question 3 but I understand the equation. Thtnak you
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