Question
Thorold Company is a merchandising company that sells a single product for $380 per unit. The company uses the high-low method to analyze its mixed
Thorold Company is a merchandising company that sells a single product for $380 per unit. The company uses the high-low method to analyze its mixed expenses. The information given below are taken from the accounting records of Thorold Company for the three most recent months.
11. Using the high-low method, what is the amount of variable expense per unit for the mixed expense? *
$25.00 per unit
$230.00 per unit
$255.00 per unit
$257.94 per unit
None of the above
12. What is the amount of total variable expense element of the mixed expense at the high activity level? *
$450,000
$497,000
$4,590,000
$4,637,000
None of the above
13. What is the amount of fixed expense element of the mixed expense at the low activity level? *
$47,000
$57,000
$104,000
$447,000
None of the above
14. If the company expects that the number of units to be sold in April will be 16,200 units, what is the amount of total variable expenses for the month, assuming that the above expenses are the only expenses incurred during the month, and all other items are the same? *
$405,000
$3,726,000
$4,131,000
$4,178,000
None of the above
15. If the company expects that the number of units to be sold in April will be 17,800 units, what is the amount of total fixed expenses for the month, assuming that the above expenses are the only expenses incurred during the month, and all other items are the same? *
$0
$47,000
$57,000
$104,000
None of the above
16. If the company expects that the number of units to be sold in April will be 17,500 units, what is the amount of total contribution margin for the month, assuming that the above expenses are the only expenses incurred during the month, and all other items are the same? *
$2,083,500
$2,187,500
$2,625,000
$6,212,500
None of the above
Item Sales in Units Cost of Goods Sold Maintenance Expense Advertising Expense Depreciation Expense January 16,000 units $3,680,000 $447,000 $45,000 $12,000 February 17,000 units $3,910,000 $472,000 $45,000 $12,000 March 18,000 units $4,140,000 $497,000 $45,000 $12,000Step by Step Solution
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