Answered

Discover the best answers at Westonci.ca, where experts share their insights and knowledge with you. Our platform provides a seamless experience for finding reliable answers from a knowledgeable network of professionals. Our platform provides a seamless experience for finding reliable answers from a network of experienced professionals.

Pearson Electric Company uses the high-low method to analyze mixed costs. The following information relates to the production data for the first six months of the year.
Month Cost(Y) Hours(H)
January $8,050 335
February $9,750 780
March $8,040 460
April $8,110 380
May $10,210 1,055
June $9,510 755
What is the estimated total cost at an operating level of 1,180 hours, using the high-low method? (Round variable cost per unit to 2 decimal places.)

Sagot :

facundobuzzetti

Answer:

Results are below.

Explanation:

First, we need to calculate the variable and fixed costs:

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (10,210 - 8,050) / (1,055 - 335)

Variable cost per unit= $3

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 10,210 - (3*1,055)

Fixed costs= $7,045

Fixed costs= LAC - (Variable cost per unit* LAU)

Fixed costs= 8,050 - (3*335)

Fixed costs= $7,045

Now, the total cost for 1,180 hours:

Total cost= 7,045 + 3*1,180

Total cost= $10,585

Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. Thank you for choosing our platform. We're dedicated to providing the best answers for all your questions. Visit us again. We're glad you chose Westonci.ca. Revisit us for updated answers from our knowledgeable team.