High-Low, Profit Equation Crux, Inc. produces amplifiers. Each unit sells for $900. Below is informationon production/sales and
Question:
High-Low, Profit Equation
Crux, Inc. produces amplifiers. Each unit sells for $900. Below is informationon production/sales and costs for 2020:
Production and Sales in Units Production Costs Selling and Admin. Costs January 105 $88,860 $23,570 February 117 97,600 25,200 March 97 83,007 22,495 April 106 89,600 23,720 May 115 96,200 24,950 June 125 103,500 26,250 July 128 105,670 26,690 August 132 108,550 27,200 September 138 112,978 28,030 October 126 104,200 26,400 November 124 102,750 26,150 December 108 91,050 23,990 Total 1,421 $1,183,965 $304,645 Average cost per unit $833.19141 $214.38776
a. Use the high-low method to identify the fixed and variable cost components for both production costs and selling and administrative costs.
Production costs: (Use Production costs and Production Costs/Sales in units) Variable cost per unit = ??? = ????
??? 1 12
Fixed costs per month = month costs month costs ????? ????? = ?????? ?????
Selling and administrative costs: (Use Selling and administrative costs and Production Costs/Sales in units)
Variable cost per unit = ??? = ???
??? 1 12 Fixed costs per month = month costs month costs ???? ???? = ???? ????
b. The company estimates that production and sales in 2021 will be 1,650 units. Sales price per unit is indicated in the beginning above information. Based on this estimate, forecast income before taxes for 2021.
Sales ?????
Less production costs:
Variable ?????
Fixed ?????
Less selling and administrative costs:
Variable ?????
Fixed ?????
Income (loss) ?????