Suppose that the cost of producing X units of a product in a manufacturing company is F + VX where F = Total fixed cost and V = Variable cost per unit. The actual cost of producing X units is Co and this increases to C, when the actual number of units increases to X1. Using the high-low method which formula below represents the estimated value of the unit variable cost, V? A. (C1 – Co) / (X1 - Xo) B. (X1 - Xo) / (C1 – Co) C. (X1 Xo) / (Co-C1) D. (C1 – Co) / (Xo-X1)

Suppose that the cost of producing X units of a product in a manufacturing company is F + VX where F = Total fixed cost and V = Variable cost per unit. The actual cost of producing X units is Co and this increases to C, when the actual number of units increases to X1. Using the high-low method which formula below represents the estimated value of the unit variable cost, V? A. (C1 – Co) / (X1 - Xo) B. (X1 - Xo) / (C1 – Co) C. (X1 Xo) / (Co-C1) D. (C1 – Co) / (Xo-X1)

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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