Exhibit 5-2

Manchester Company is a small company that has hired you to help them estimate costs. They present you with the following information from the companys most recent fiscal year.

Sales (2,000 units) $1,000,000 Cost of goods sold (24% of sales) Store supervisor's annual salary Annual operating costs 70,000 Annual advertising and promotion Sales commissions (5% of sales)

240,000 65,000

10,000 50,000

a. b. c. d. e.

6.

Refer to Exhibit 5-2. What was the variable cost per unit for the companys most recent fiscal year? $120 per unit $180 per unit

$145 per unit $150 per unit None of the answer choices is correct.

a. b. c. d. e.

a. b. c. d. e.

7.

8.

Refer to Exhibit 5-2. What are the estimated total costs if Manchester expects to sell 2,100 computers next year? $439,500 $523,000

$460,000 $449,500 None of the answer choices is correct.

Refer to Exhibit 5-2. What type of cost estimation method is being used for Manchester? Regression analysis Scattergraph method Account analysis

High-low method None of the answer choices is correct.