Alden Company's monthly data for the past year follow. Management wants to use these data to predict future variable and fixed costs. Month 1 2 3 4 5 6 Units Sold 317,500 162,500 262,500 202,500 287,500 187,500 Total Cost Month Units Sold $ 155,000 7 8 98,750 203, 100 9 Total cost at the high point Variable costs at the high point: 97,500 199,000 109,500 10 11 12 362,500 267,500 76,500 147,500 91,500 97,500 Total Cost $ 296,300 149,250 67,500 128, 125 91,500 84,150 Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method. (Do not round intermediate alculations.) High-Low method - Calculation of variable cost per unit High-Low method - Calculation of fixed costs
Alden Company's monthly data for the past year follow. Management wants to use these data to predict future variable and fixed costs. Month 1 2 3 4 5 6 Units Sold 317,500 162,500 262,500 202,500 287,500 187,500 Total Cost Month Units Sold $ 155,000 7 8 98,750 203, 100 9 Total cost at the high point Variable costs at the high point: 97,500 199,000 109,500 10 11 12 362,500 267,500 76,500 147,500 91,500 97,500 Total Cost $ 296,300 149,250 67,500 128, 125 91,500 84,150 Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method. (Do not round intermediate alculations.) High-Low method - Calculation of variable cost per unit High-Low method - Calculation of fixed costs
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Alden Company's monthly data for the past year follow. Management wants to use these data to predict future variable
and fixed costs.
Month Units Sold
1
2
3
4
5
6
317,500
162,500
262,500
202,500
287,500
187,500
Total Cost
$ 155,000
98,750
203, 100
97,500
199,000
109,500
Total cost at the high point
Variable costs at the high point:
Volume at the high point:
Variable cost per unit
Total variable costs at the high point
Total fixed costs
Month
7
8
9
Total cost at the low point
Variable costs at the low point:
Volume at the low point:
Variable cost per unit
Total variable costs at the low point
Total fixed costs
10
11
12
Units Sold
362,500
267,500
76,500
147,500
91,500
97,500
Total Cost
$ 296,300
149,250
67,500
128, 125
1. Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method. (Do not round intermediate
calculations.)
91,500
84,150
High-Low method - Calculation of variable cost per unit
High-Low method- Calculation of fixed costs
2. Predict future total costs when sales volume is (a) 375,000 units and (b) 415,000 units.
Units
Total
Predictions
(a)
375,000
(b)
415,000
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