Question
Exercise 2-16A (Algo) Estimating fixed and variable costs using the high-low method LO 2-6 Munoz Boat Company makes inexpensive aluminum fishing boats. Production is
Exercise 2-16A (Algo) Estimating fixed and variable costs using the high-low method LO 2-6 Munoz Boat Company makes inexpensive aluminum fishing boats. Production is seasonal, with considerable activity occurring in the spring and summer. Sales and production tend to decline in the fall and winter months. During year 2, the high point in activity occurred in June when it produced 208 boats at a total cost of $166,750. The low point in production occurred in January when it produced 33 boats at a total cost of $46,000. Required a. Use the high-low method to estimate the amount of fixed cost incurred each month by Munoz Boat Company. b. Determine the total estimated cost if 110 boats are made. a. Fixed cost b. Total estimated cost
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