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This document contains ink, shapes and images that ar... > Question 2 Davy Jones Ltd manufacturer of fine china and stoneware is troubled by
This document contains ink, shapes and images that ar... > Question 2 Davy Jones Ltd manufacturer of fine china and stoneware is troubled by the fluctuations in productivity and wants to compute how much manufacturing support costs are related to the various sizes of batches of output. The following data show the results of a random sample of 6 batches of one pattern of stoneware: Required: Batch Size Support Cost/$ 12 190 18 220 24 280 30 360 36 380 42 12 480 Use the High-Low Method to: (a) Calculate the variable cost per unit. (b) Find the amount of fixed cost present in the cost structure. (c) Develop a cost function/equation that relates total cost to activity levels. (d) Calculate the production level at which total costs is $400. Question 3
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