MANAGERIAL ACCOUNTING FUND. W/CONNECT
5th Edition
ISBN: 9781259688713
Author: Wild
Publisher: MCG
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Chapter 5, Problem 3QS
The following information is available for a company’s maintenance cost over the last seven months. Using the high-low method, estimate both the fixed and variable components of its maintenance cost.
Month | Maintenance Hours | Maintenance Cost |
June………………. | 9 | $5.450 |
July……………….. | 18 | 6,900 |
August………….. | 12 | 5,100 |
September……. | 15 | 6,000 |
October………… | 21 | 6,900 |
November…….. | 24 | 8,100 |
December…….. | 6 | 3,600 |
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The following information is available for a company’s maintenance cost over the last seven months. Using the high-low method, estimate both the fixed and variable components of its maintenance cost. Month Units Produced Maintenance CostJune . . . . . . . . . . . . . . . 90 $5,450 July . . . . . . . . . . . . . . . . 180 6,900 August . . . . . . . . . . . . . 120 5,100 September . . . . . . . . . . 150 6,000 October . . . . . . . . . . . . 210 6,900 November . . . . . . . . . . 240 8,100 December . . . . . . . . . . . 60 3,600
Pablo Company wishes to determine the fixed portion of its maintenance expenses (a semi-variable expense), as measured against direct labor hours for the first three months of the year. Information for the first quarter is as follows (refer to the attached picture): What is the fixed portion of Pablo Company’s maintenance expense using high-low method? *
direct hours labor maintenance costs
January 25000 210000
February 30000 240000
march 27000 222000
The following information is available for a company’s maintenance cost over the last seven months.
Month
Units Produced
Maintenance Cost
June
90
$
4,190
July
180
6,260
August
120
4,880
September
150
5,570
October
210
6,950
November
240
7,640
December
60
3,500
Using the high-low method, estimate both the fixed and variable components of its maintenance cost.
High-Low method - Calculation of variable cost per maintenance hour
0
Total cost at the high point
Variable costs at the high point:
Volume at the high point:
Variable cost per unit produced
Total variable costs at the high point
Total fixed costs
Total cost at the low point
Variable costs at the low point:
Volume at the low point:
Variable cost per unit produced
Total variable costs at the low point
Total fixed costs
Chapter 5 Solutions
MANAGERIAL ACCOUNTING FUND. W/CONNECT
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