BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 21, Problem 21.1BPE
Textbook Problem

High-low method

The manufacturing costs of Carrefour Enterprises for three months of the year follow:

  Total Cost Units Produced
July $300,000 2,700 units
August 440,000 5,500
September 325,000 3,500

Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost.

Expert Solution

(a)

To determine

High-low method: It is the method of estimating the variable cost per unit and the fixed costs by using the highest and the lowest level of activities and their associated costs.

To determine: the variable cost per unit.

Explanation of Solution

Determine the variable cost per unit.

Difference in total cost =$140,000 (refer Table 1)

Difference in units produced =2,800 units (refer Table 1)

Variablecostperunit =DifferenceintotalcostDifferenceinunitsproduced=$140,0002

Expert Solution

(b)

To determine
the total fixed cost.

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Chapter 21 Solutions

Accounting
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