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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Financial Accounting
Authors: Robert Kemp, Jeffrey Waybright
3rd Edition
133427889, 978-0133427882
