A department of Delta Company incurred the following costs for the month of June. Variable costs, and the variable portion of mixed costs, are a function of the number of units of activity: Activity level in units Variable costs Fixed costs 10,000 $ 20,000 60,000 40,000 Mixed costs Total costs $ 120,000 During July, the activity level was 16,000 units, and the total costs incurred were $141,000. Required: a. Calculate the variable costs, fixed costs, and mixed costs incurred during July. b. Use the high-low method to calculate the cost formula for mixed cost.
A department of Delta Company incurred the following costs for the month of June. Variable costs, and the variable portion of mixed costs, are a function of the number of units of activity: Activity level in units Variable costs Fixed costs 10,000 $ 20,000 60,000 40,000 Mixed costs Total costs $ 120,000 During July, the activity level was 16,000 units, and the total costs incurred were $141,000. Required: a. Calculate the variable costs, fixed costs, and mixed costs incurred during July. b. Use the high-low method to calculate the cost formula for mixed cost.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:A department of Delta Company incurred the following costs for the month of June. Variable costs, and the variable portion of mixed
costs, are a function of the number of units of activity:
Activity level in units
Variable costs
Fixed costs
10,000
$ 20,000
60,000
40,000
$ 120,000
Mixed costs
Total costs
During July, the activity level was 16,000 units, and the total costs incurred were $141,000.
Required:
a. Calculate the variable costs, fixed costs, and mixed costs incurred during July.
b. Use the high-low method to calculate the cost formula for mixed cost.
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