Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

EX 21-7 HIGH-LOW METHOD Tashiro Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components

EX 21-7 HIGH-LOW METHOD

Tashiro Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows:

Units Produced Total Costs

60,000 $19,200,000

69,000 20,010,000

90,000 24,090,000

a. Determine the variable cost per unit and the total fixed cost.

b. Based on part (a), estimate the total cost for 86,000 units of production.

EX 21-8. HIGH-LOW METHOD FOR A SERVICE COMPANY

Boston Railroad decided to use the high-low method and operating data from the past six months to estimate the fixed and variable components of transportation costs. The activity base used by Boston railroad is a measure of railroad operating activity, termed "gross-ton miles," which is the total number of tons multiplied by the miles moved.

TRANSPORTATION COSTS GROSS-TON MILES

January $1,776,000 560,000

February 2,700,000 1,000,000

March 1,650,000 500,000

April 1,860,000 600,000

May 1,440,000 400,000

June 1,566,000 460,000

Determine the variable cost per gross-ton mile and the total fixed cost.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting For Value

Authors: Stephen Penman, S Penman

1st Edition

0231151187, 9780231151184

More Books

Students also viewed these Accounting questions

Question

What do you think your problem does to you?

Answered: 1 week ago