Problem 21-2A Cost behavior estimation LO P1

Problem 21-2A Cost behavior estimation LO P1 [The following information applies to the questions displayed below. Alden Co.'s monthly unit sales and total cost data for its operating activities of the past year follow. Management wants to use these data to predict future fixed and variable costs. Month Month 7 Units Sold 315,000 160,000 260,000 200,000 285,000 185,000 Total Cost $152,500 96,250 200,600 95,000 196,500 107,000 Units Sold 365,000 265,000 77,000 145,000 89,000 95,000 9 10 11 12 Total Cost $314,800 146,750 70,000 125,625 89,000 86,650 4 5 6 Problem 21-2A Part 1 1. Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method. (Do not round intermediate calculations.) Change in cost Variable cost per unit = $ 0.85 Change in volume High-Low method - Calculation of Variable Cost per unit $ Cost at high point minus cost at low point 244,800 $ Volume at high point minus volume at low point 288,000 High-Low method - Calculation of Fixed Costs $ 314,800.00 Total cost at the high point Variable costs at the high point: Volume at the high point: 365,000 units sold 0.85 Variable cost per unit $ Total variable costs at the high point Total fixed costs $ 70,000.00 Total cost at the low point Variable costs at the low point: Volume at the low point: 77,000 units sold Variable cost per unit $ 0.85 Total variable costs at the low point 65,450.00 4,550.00 Total fixed costs $ Problem 21-2A Cost behavior estimation LO P1 [The following information applies to the questions displayed below.] Alden Co.'s monthly unit sales and total cost data for its operating activities of the past year follow. Management wants to use these data to predict future fixed and variable costs. Month 1 2 3 4 5 6 Units Sold 315,000 160,000 260,000 200,000 285,000 185,000 Total Cost $152,500 96,250 200,600 95,000 196,500 107,000 Month 7 8 9 10 11 12 Units Sold 365,000 265,000 77,000 145,000 89,000 95,000 Total Cost $314,800 146,750 70,000 125,625 89,000 86,650 Problem 21-2A Part 2 2. Predict future total costs when sales volume is (a) 370,000 units and (b) 410,000 units. Predictions Sales (units) 370,000 410,000 Variable costs $ 1 Fixed costs Total $ 1 $ 0