Al-Bustan Co. gathered the following information on total costs and factory machine usage for the last six months:           Month Total cost Factory Machine Hours January 14,810 13,900 February 29,210 16,600 March 29,000 6,600 April 19,340 13,200 May 29,810 16,500 June 14,910 6,800   Instructions Using the high-low method of analyzing costs, answer the following questions and show computations to support your answers.   (a)         What is the variable portion of the mixed costs? (b)         What is the fixed portion of the mixed costs? (c)          If it is estimated that 5,000 factory machine hours will be run in July, what is the expected total cost for July?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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  1. Al-Bustan Co. gathered the following information on total costs and factory machine usage for the last six months:

 

       

Month

Total cost

Factory Machine Hours

January

14,810

13,900

February

29,210

16,600

March

29,000

6,600

April

19,340

13,200

May

29,810

16,500

June

14,910

6,800

 

Instructions

Using the high-low method of analyzing costs, answer the following questions and show computations to support your answers.

 

(a)         What is the variable portion of the mixed costs?

(b)         What is the fixed portion of the mixed costs?

(c)          If it is estimated that 5,000 factory machine hours will be run in July, what is the expected total cost for July?

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