Question
Analyze cost behavior and prepare a cost function. Activity Level Total Costs ($) 1,000 units $10,000 2,000 units $15,000 3,000 units $20,000 Requirements: Determine the
Analyze cost behavior and prepare a cost function.
Activity Level | Total Costs ($) |
1,000 units | $10,000 |
2,000 units | $15,000 |
3,000 units | $20,000 |
Requirements:
Determine the fixed and variable components of the cost.
Prepare a cost function using the high-low method.
Forecast total costs at different activity levels and discuss the accuracy of the cost function.
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Accounting Information Systems
Authors: Marshall B. Romney, Paul J. Steinbart
12th edition
132552620, 978-0132552622
