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Cookie Crumbs bakes the best cookies in town. Customers line up for their fresh-made deluxe chocolate chip cookies. The cost of electricity is considered a
Cookie Crumbs bakes the best cookies in town. Customers line up for their fresh-made deluxe chocolate chip cookies. The cost of electricity is considered a mixed cost by the company. The variable portion of the electricity cost is assumed to be dependant on the number of units produced. The following is the related cost and activity data for the past six months. Month Volume of Cookies (number of units) Cost of Electricity July 32,000 $3,700 August 45,000 $4,500 September 35,000 $3,800 October 25,000 $3,400 November 60,000 $5,200 December 70,000 $6,000 Required a) Using the high-low method, factor out the fixed and variable portions of the electricity cost. b) Assume that the company used the
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