Question
Alden Co.'s monthly unit sales and total cost data for its operating activities of the past year follow. Management wants to use these data
Alden Co.'s monthly unit sales and total cost data for its operating activities of the past year follow. Management wants to use these data to predict future fixed and variable costs. Month Units Sold Total Cost Month 1 322,000 $159,500 7 Units Sold 358,000 Total Cost $263,504 2 167,000 103,290 8 272,000 153,750 3 267,000 207,600 9 75,600 63,000 4 207,000 102,000 10 152,000 132,625 5 292,000 192,000 203,500 11 96,000 96,000 114,000 12 102,000 79,650 1. Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method. (Do not round intermediate calculations.) High-Low method - Calculation of Variable Cost per unit Change in cost Change in volume Cost at high point minus cost at low point Volume at high point minus volume at low point Total cost at the high point Variable costs at the high point Volume at the high point Variable cost per unit 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 Total variable costs at the low point Total fixed costs High-Low method Calculation of Fixed Costs
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