Question
L ancer Audio produces a high-end DVD player that sells for $1,300. Total operating expenses for the past 12 months are as follows: Units Produced
Lancer Audio produces a high-end DVD player that sells for $1,300. Total operating expenses for the past 12 months are as follows:
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Required
a. | Use the high-low method to estimate fixed and variable costs. |
b. | Based on these estimates, calculate the break-even level of sales in units. (Round to the nearest whole unit.) |
c. | Calculate the margin of safety for the coming August assuming estimated sales of 175 units. |
d. | Estimate total profit assuming production and sales of 175 units. |
e. | Comment on the limitations of the high-low method in estimating costs for Lancer Audio. |
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