Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

This problem has two parts. In Part A, you are asked to do account analysis based on cost and activity information that you are given

image text in transcribed
image text in transcribed
This problem has two parts. In Part A, you are asked to do account analysis based on cost and activity information that you are given for one particular past month. In Part B, you are asked to do the high-low method based on cost and activity information for that same month and another past month. Note that for both parts, you are asked to make predictions for a future month. Lach part of the problem is worth five points and has two questions. There is no partial credit within a part, so to get the five points for a part, you must answer both questions correctly You get five tries for each part (not for each individual question), Meers Production Company makers several products and sells them for an average price of 585. Mears accountant is considering two different approaches to estimating the Tom's total monthly cost function. :) account analysis, and 2) Nigh-low. In both cases, she used units of production as the independent variable for the accounts roach, the developed the cost function by analyzing each cost item in February, when production was 1,000 unts. The following are the results of that analysis Cost Item Total Cost Fixed Cost Variable Cost Direct materials 50 56,480 Director $8.640 $0 $8.540 Factory overhead 58,120 $3,440 54,600 Selling expenses 56,260 $3.560 $2,700 Administrative expenses $1,650 $3,650 30 Total expenses $33,150 $10,650 $22.500 For the high-low method, she developed the cost function using the data from February above and data from August, when production was 2,450 units and total costs were 542,100. After developing the two cost functions, the accountant used them to make predictions for the month of December, when production was expected to be 1,900 units. REQUIRED MOUNO UNIT COSTS TO TWO DECIMAL PLACES AND TOTAL COSTS TO THE NEAREST DOLLAR). Part A ( tries 5 points) 1. Using account analysis, what was the accountant's estimate of total fixed costs for December 2. Lwing account analysis, what was the accountant's catimate of actabla.coster unit for December! brewer Tries 0/5 Part B (5 tries; 5 points) 1. Using the high-low method, what was the accountant's estimate of total fixed costs for December? 2. Using the high-low method, what was the accountant's estimate of total variable costs for December? Submit Answer Trles 0/5

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Connect For Data Analytics For Accounting

Authors: Author

2nd Edition

1264152000, 9781264152001

More Books

Students also viewed these Accounting questions

Question

To what microcultural groups do you belong?

Answered: 1 week ago