b)

The High-Low Method The high-low method is the most basic method used for analyzing moed costs. The purpose of this analysis is to estimate the fixed and variable cost components of moed costs by comparing mixed costs at different levels along the relevant range or the appropriate activity base. Conduct a cost analysis for the following business using the high-low method. The following table contains data for Strobel Tool and Die, a maker of various car parts Month Units Total Produced Cost 900 44,400 800 42,800 April May June 1,200 49,200 July 1,300 50,800 August 1,700 57,200 For this business, the activity base is Select APPLY THE CONCEPTS: Use the high-low method to conduct a cost analysis Conduct a cost analysis for Strobel Tool and Die, a maker of various car parts, using the high-low method. First, calculate the difference between the levels of activity and total cost at its highest and lowest levels. Enter all amounts as positive numbers. and the Select is 800 units-1,700 units. Units Total Produced Cost level Lowest level The total fixed cost for a business Select change with changes in activity levels. This means that the difference in total cost between the highest and lowest activity levels in the amount of $is the change in Select cost. Calculating the Variable Cost per Unit, Using the High-Low Method Naxt, calculate the variable cost per unit, using the high-low values. The varia ble cost per unit is used to find the fixed cost variable cost per unit ? Variable Cost per$ Unit per Unit Units