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. MonthUnits SoldTotal Cost1319,000$ 156,5002164,000100,2503264,000204,6004204,00099,0005289,000200,5006189,000111,0007361,000285,2968269,000150,750976,20066,00010149,000129,6251193,00093,0001299,00082,650 Total cost at the highest volumeVariable costs at highest volume:Highest volumeVariable cost per unitTotal variable costs at highest volumeTotal fixed costsTotal cost at the lowest volumeVariable costs at lowest volume:Lowest volumeVariable cost per unitTotal variable costs at lowest volumeTotal fixed costsHigh-Low method - Calculation of variable cost per unitHigh-Low method - Calculation of fixed costs

The high low method is way attempted by company to separate the fixed and variable costs from the…

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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

Total cost at the highest volume
Variable costs at highest volume:
Highest volume
Variable cost per unit
Total variable costs at highest volume
Total fixed costs
Total cost at the lowest volume
Variable costs at lowest volume:
Lowest volume
Variable cost per unit
Total variable costs at lowest volume
Total fixed costs
High-Low method - Calculation of variable cost per unit
High-Low method - Calculation of fixed costs

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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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