1.)

Mitchum, Inc. produced different amounts of product X each month as follows: Units Costs April 370 $21,300 May 420 $22,050 June 350 $21,000 July 550 $24,000 August 450 $22,500 Using the high-low method, determine: (1) The variable expense per unit (2) The fixed expense (3) If Mitchum produced 410 units what would total expenses be?

2.)

Rainbow Co. has been producing a part for a camera they manufacture. The costs for this part are as follows: Fixed costs $250,000 Total variable costs $120,000 Units produced 30,000 units Robbins has an opportunity to purchase this part rather than manufacture it. To purchase the part will cost $6 a unit. If the part is purchased, fixed costs will be reduced by 20%. Company could use idle capacity to manufacture other products with contribution margin of $15,000. Should Robbins Co. make or buy this part? Show how you arrived at your decision

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