BE3.7 (LO 2), AN Helen is looking at the partial information left behind by her former supervisor, Lyle. She knows he used the high-low method to estimate the cost function because she sees his cryptic “H-L” scribbled on the page. She sees that the high point related to 35 units at a total cost of $328. She also finds the total fixed cost estimate of $97. She can’t find the low point written anywhere, and she needs the variable cost in order to estimate next month’s costs. Help Helen determine the variable cost per unit and then predict next month’s costs if 33 units are made.

Answers

Answer 1

1. The variable cost per unit is $6.60.

2. Next month's costs if 33 units are made will be as follows:

Fixed costs = $97Variable costs = $217.80Total costs = $314.80

What is the high-low method?

The high-low method is a cost accounting technique to separate the total fixed costs from the variable costs.

Using the high-low method, the fixed costs are separated from the total costs to determine the variable costs (in total and per unit).

Data and Calculations:

Total production units = 35

Total costs = $328

Estimated total fixed costs = $97

Total variable costs = total costs - fixed costs

= $231 ($328 - $97)

Unit cost per unit = $6.60 ($231/35)

Next month's Costs at 33 units:

Fixed costs = $97

Variable costs = $217.80 ($6.60 x 33)

Total costs = $314.80

Thus, the variable cost per unit is $6.60, while the total costs for next month will be $314.80, using the high-low costing method.

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Related Questions

What is the purpose of a Summons?
A. A Summons tells the defendant to appear in court.
B. A Summons is a complaint against a party.
OC. A Summons is a reply to a Complaint.
D. A Summons is a pre-trial form of discovery.

Answers

The answer should be D

Answer:

A. A Summon tells the defendant to appear in court

Explanation:

Can someone please tell me which ones are hard or soft skills?
Creativity
Computer Programing
Graphic Design
Civil Engineering
Leadership
Communication
Flexibility
Video editing
Server Maintenance
Time Management

Answers

Answer: tell me

Explanation: when you find out let me

Which of the following statements accurately describes the Morph transition?
O It can only affect the size and shape of an object.
It can only change one attribute of an object.
It can be used to merge shapes, text, and WordArt
It requires just one slide..​

Answers

Answer:

I think it is, It requires just one Slide to the next 100%

Explanation:

The Morph transition means that it  allows you to animate smooth movement from one slide to the next.

This is right

Answer:

B, C, D

Explanation: right on edge22

Consider two countries: Country A can produce six automobiles or twelve
movies with the same amount of resources. Country B can produce five
automobiles or eight movies with the same amount of resources. Using
Ricardo’s Theory of Comparative Advantage, determine which country will
produce automobiles, which will produce movies, and the range of relative
prices for these products within which these countries trade.

Answers

Because the opportunity cost of creating a car in Country B is cheaper than the potential cost of generating movies in Country A, Country A would make movies while Country B would produce autos.

What is the justification for the above?

According to the idea of comparative advantage, countries should manufacture and trade only goods in which they have a comparative advantage, i.e. commodities in which they can specialize.

To determine a country's comparative advantage, first compute the opportunity cost of making movies and vehicles in each.

Country A:

The Opportunity cost of producing 1 automobile = 2 moviesOpportunity cost of producing 1 movie = 1/2 automobile

Country B:

Opportunity cost of producing 1 automobile = 8/5 moviesOpportunity cost of producing 1 movie= 5/8 automobiles.

Thus, it is right to state that because the opportunity cost of creating a car in Country B is cheaper than the potential cost of generating movies in Country A, Country A would make movies while Country B would produce autos.

What is Richard's Theory of Comparative Advantage?

According to Ricardo's widely regarded comparative advantage theory, states can obtain an international trade advantage by focusing on manufacturing items with the lowest opportunity costs when compared to other nations.

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