Question
High-Low Method: 1) Surplus Company manufacturers parts for old Army Hummers. The following data is presented for the 4 weeks in June: Week 1 2,000
High-Low Method: 1) Surplus Company manufacturers parts for old Army Hummers. The following data is presented for the 4 weeks in June:
Week 1 2,000 units produced, $3,000 depreciation (fixed), $1,000 indirect labor (fixed), $5,000 utilities cost (semivariable), and $4,000 factory supplies (variable).
Week 2 3,000 units produced, $3,000 depreciation (fixed), $1,000 indirect labor (fixed), $7,000 utilities cost (semivariable), and $6,000 factory supplies (variable).
Week 3 2,500 units produced, $3,000 depreciation (fixed), $1,000 indirect labor (fixed), $6,000 utilities cost (semivariable), and $5,000 factory supplies (variable).
Week 4 2,000 units produced, $3,000 depreciation (fixed), $1,000 indirect labor (fixed), $5,000 utilities cost (semivariable), and $4,000 factory supplies (variable).
a) Use the high-low method to determine the formula the company can use to forecast future production rates.
b) The company expects an influx of orders. Calculate the estimated semivariable cost if the influx was 6,000 units.
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