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Are the following highlighted portions done correctly? Also are there more advantages or disadvantages to using the Hi-Low Method? Anthony Davis, Owner of The Brow
Are the following highlighted portions done correctly? Also are there more advantages or disadvantages to using the Hi-Low Method?
Anthony Davis, Owner of The Brow Unlimited, operates a snow cone stand near the local park. To plan for the future, Anthony Davis wants to determine its cost behavior patterns. It has the following information available about its operating costs and the number of snow cones served Month Number of snow cones January February 7,000 March Total operating costs $5,680 $6,400 $5760 $6,330 $7320 $6,575 6,400 6200 6,900 ril May June 7,250 A. Using the High-Low Method, determine the mixed cost equation for Pelicans lce 4062001560/2,200-S0.71 per cone 5760 = (.71 x 6200) + Fixed Cost 1358 = Fixed cost. Mixed Cost- 71x 1358 B. What are some of the advantages of using the Hi-Low Method, what are some of the disadvantages? Disadvantages: High Low Method uses only 2 data points instead of all of them which is what regression analysis uses Advantages: It's easy to calculate the mixed cost formula because you need only 2 data points. Any more
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