Question
The managerial accountant at Fast and Mean Manufacturing reported that the organization contains an automated production line to manufacture and produce its products for consumers
The managerial accountant at Fast and Mean Manufacturing reported that the organization contains an automated production line to manufacture and produce its products for consumers to enjoy in the marketplace. The managerial accountant reported that the company uses the high-low method to estimate the costs in the new budget. The managerial accountant reported the following information:
Month | Total Machine-Hours | Total Costs |
January | 250,000 | $5,500,000 |
February | 248,000 | $5,260,000 |
March | 249,000 | $5,400,000 |
April | 248,000 | $5,220,000 |
May | 238,000 | $5,180,000 |
June | 230,000 | $5,130,000 |
Compute the slope of the mixed cost, or the variable cost per unit of activity.
Compute the vertical intercept, or the fixed cost component of the mixed cost.
What is the mixed cost equation?
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