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The following information is available for a company's maintenance cost over the last seven months. Maintenance Cost Month Units Produced June July 90 180
The following information is available for a company's maintenance cost over the last seven months. Maintenance Cost Month Units Produced June July 90 180 August 130 September 160 October 220 November 250 90 $ 3,750 4,700 3,950 4,400 5,300 5,600 3,200 December Using the high-low method, estimate both the fixed and variable components of its maintenance cost. High-Low method - Calculation of variable cost per unit produced Change in cost Change in volume Cost at high point minus cost at low point Volume at high point minus volume at low point $ 2,400 Variable cost per unit produced = $ 15.00 160 Total cost at the high point Variable costs at the high point: Volume at the high point: Variable cost per unit produced Total variable costs at the high point Total fixed costs Total cost at the low point Variable costs at the low point: Volume at the low point: Variable cost per unit produced Total variable costs at the low point Total fixed costs $ 5,600.00 250 units $ 3,200.00 90 units 0.00
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