Dont Have one
Autor: moto • June 22, 2012 • Essay • 315 Words (2 Pages) • 1,239 Views
4-5
High-low method:
Estimate of variable cost =
Here, the cost at highest level of activity (July) = $20,500
The cost at lowest level of activity (May) = 8,500
Highest level of activity (July) = 900,000
Lowest level of activity (May) = 300,000
Estimate of variable cost = 20,500- 8,500 / 900,000-300,000 =
12,000/600,000 =.02 per copy
Lowest level of activity (340,200 units);
Total variable cost = variable cost per unit x total units
= $0.02 x 300,000 Total variable cost lowest activity = $6,000
The total cost at the lowest activity = $8,500
Fixed cost at lowest activity = Total cost - Variable cost
= 8,500 - 6,000
Fixed cost at lowest activity = $2,500
High-low method:
Estimate of variable cost =
Here, the cost at highest level of activity (July) = $20,500
The cost at lowest level of activity (May) = 8,500
Highest level of activity (July) = 900,000
Lowest level of activity (May) = 300,000
Estimate of variable cost = 20,500- 8,500 / 900,000-300,000 =
12,000/600,000 =.02 per copy
Lowest level of activity (340,200 units);
Total variable cost = variable cost per unit x total units
= $0.02 x 300,000 Total variable cost lowest activity = $6,000
The total cost at the lowest activity = $8,500
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