Question
The AustinCompanyhasestimatedcostsforthefollowingmonthly productionlevels: Productionvolume(W1its) 1,000 2,000 3,000 CostA $5,000 $8,000 $11,000 CostB 10,000 20,000 30,000 Coste 15,000 15,000 15,000 CostD 20,000 24,000 28,000 CostE 25,000
- The AustinCompanyhasestimatedcostsforthefollowingmonthly productionlevels:
Productionvolume(W1its) | 1,000 | 2,000 | 3,000 |
CostA | $5,000 | $8,000 | $11,000 |
CostB | 10,000 | 20,000 | 30,000 |
Coste | 15,000 | 15,000 | 15,000 |
CostD | 20,000 | 24,000 | 28,000 |
CostE | 25,000 | 50,000 | 75,000 |
CostF | 30,000 | 30,000 | 30,000 |
CostG | 35,000 | 50,000 | 65,000 |
CostH | 40,000 | 40,000 | 40,000 |
Totalmanufacturing costs | $180,000 | $237,000 | $294,000 |
Required:
- Identifyeachcostasavariable,fixed,ormixedcost.
CostA | |
CostB | |
CostC | |
CostD | |
CostE | |
CostF | |
CostG | |
CostH |
- Measurethefollowingequation usingthe high-low method (hint:use the totalmanufacturing costs and units from the first and third columns.):
Totalmanufacturingcosts=a+b(units)
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Financial and Managerial Accounting
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
12th edition
978-1133952428, 1285078578, 1133952429, 978-1285078571
