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(SIDE NOTE: I was able to answer questions 1-4, but i really need help with the rest of them) High-Low Method to Determine Fixed Cost

(SIDE NOTE: I was able to answer questions 1-4, but i really need help with the rest of them)

High-Low Method to Determine Fixed Cost and Variable Rate

McGarvey Manufacturing Company had the following 12 months of data on purchasing cost and number of purchase orders.

Month Purchasing Cost Number of Purchase Orders
January $19,250 370
February 18,050 330
March 18,200 320
April 18,050 410
May 19,345 400
June 19,500 450
July 19,670 460
August 20,940 560
September 19,430 440
October 20,020 600
November 18,800 470
December 19,340 480

Required:

1. Determine the high point and the low point.

Month with high number of purchase orders (Select)

January...FebruaryMarch...AprilMayJuneJulyAugustSeptemberOctoberNovemberDecember

Month with low number of purchase orders (Select)

January...FebruaryMarch...AprilMayJuneJulyAugustSeptemberOctoberNovemberDecember

2. Calculate the variable rate for purchasing cost based on the number of purchase orders. (Round to the nearest cent.) $fill in the blank per purchase order

3. Calculate the fixed monthly cost of purchasing. $fill in the blank

4. Write the cost formula for the purchasing activity showing the fixed cost and the variable rate. Round variable rate to the nearest cent.

Total purchasing cost= $fill in the blank + ($fill in the blank * fill in blank)

Fixed costMixed costMonthsPurchase ordersUnitsVariable rate

5. If McGarvey Manufacturing Company estimates that next month will have 480 purchase orders, what is the total estimated purchasing cost for that month?

$fill in the blank

6. What if McGarvey Manufacturing wants to estimate purchasing cost for the coming year and expects 6,000 purchase orders? What will estimated total purchasing cost be? $fill in the blank

What is the total fixed purchasing cost? $fill in the blank

Why doesn't it equal the fixed cost calculated in Requirement 3 above?

A. because there are more purchase orders

B. because there are 12 months in the year

c. because the high-low method can no longer be usedit is the same

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