and fixed costs. Month Units Sold 1 2 3 4 5 6 320,000 160,000 280,000 200,000 300,000 200,000 Total Cost $ 160,000 100,000 220,000 100,000 230,000 120,000 Change in cost Change in volume 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 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 Month 7 8 * 9 1. Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method. (Do not round intermediate calculations.) 10 11 12 Units Sold 340,000 280,000 80,000 160,000 100,000 110,000 Total Cost $ 220,000 160,000 64,000 140,000 100,000 80,000 High-Low method - Calculation of variable cost per unit Cost at high point minus cost at low point Volume at high point minus volume at low point High-Low method - Calculation of fixed costs $ 80,000 units sold 64,000.00 0.00 0
and fixed costs. Month Units Sold 1 2 3 4 5 6 320,000 160,000 280,000 200,000 300,000 200,000 Total Cost $ 160,000 100,000 220,000 100,000 230,000 120,000 Change in cost Change in volume 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 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 Month 7 8 * 9 1. Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method. (Do not round intermediate calculations.) 10 11 12 Units Sold 340,000 280,000 80,000 160,000 100,000 110,000 Total Cost $ 220,000 160,000 64,000 140,000 100,000 80,000 High-Low method - Calculation of variable cost per unit Cost at high point minus cost at low point Volume at high point minus volume at low point High-Low method - Calculation of fixed costs $ 80,000 units sold 64,000.00 0.00 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![**Alden Company Cost Analysis: High-Low Method**
Alden Company's monthly data for the past year follows. Management wants to use these data to predict future variable and fixed costs.
| Month | Units Sold | Total Cost | Month | Units Sold | Total Cost |
|-------|------------|------------|-------|------------|------------|
| 1 | 320,000 | $160,000 | 7 | 340,000 | $220,000 |
| 2 | 160,000 | $100,000 | 8 | 280,000 | $160,000 |
| 3 | 280,000 | $200,000 | 9 | 80,000 | $64,000 |
| 4 | 200,000 | $200,000 | 10 | 160,000 | $140,000 |
| 5 | 200,000 | $230,000 | 11 | 100,000 | $100,000 |
| 6 | 200,000 | $120,000 | 12 | 110,000 | $80,000 |
**1. Estimation of Variable and Fixed Costs Using High-Low Method**
Do not round intermediate calculations.
**High-Low Method - Calculation of Variable Cost per Unit**
\[
\text{Change in cost} \quad \text{(Cost at high point minus cost at low point)}
\]
\[
\text{Change in volume} \quad \text{(Volume at high point minus volume at low point)}
\]
**High-Low Method - Calculation of Fixed Costs**
\[
\text{Total cost at the high point:} \quad
\]
\[
\text{Variable costs at the high point:}
\]
- Volume at the high point:
- Variable cost per unit:
\[
\text{Total variable costs at the high point:}
\]
\[
\text{Total fixed costs:}
\]
**Total Cost at the Low Point**
\[
\$64,000.00
\]
**Variable Costs at the Low Point**
- Volume at the low point: 80,000 units sold
- Variable cost per unit:
\[
\text{Total variable costs at the low point:}](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9870bfeb-e26e-42f8-8342-bb7dac6347ce%2F888f8710-9c19-492e-a441-c0cea95e6195%2F45yep3_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Alden Company Cost Analysis: High-Low Method**
Alden Company's monthly data for the past year follows. Management wants to use these data to predict future variable and fixed costs.
| Month | Units Sold | Total Cost | Month | Units Sold | Total Cost |
|-------|------------|------------|-------|------------|------------|
| 1 | 320,000 | $160,000 | 7 | 340,000 | $220,000 |
| 2 | 160,000 | $100,000 | 8 | 280,000 | $160,000 |
| 3 | 280,000 | $200,000 | 9 | 80,000 | $64,000 |
| 4 | 200,000 | $200,000 | 10 | 160,000 | $140,000 |
| 5 | 200,000 | $230,000 | 11 | 100,000 | $100,000 |
| 6 | 200,000 | $120,000 | 12 | 110,000 | $80,000 |
**1. Estimation of Variable and Fixed Costs Using High-Low Method**
Do not round intermediate calculations.
**High-Low Method - Calculation of Variable Cost per Unit**
\[
\text{Change in cost} \quad \text{(Cost at high point minus cost at low point)}
\]
\[
\text{Change in volume} \quad \text{(Volume at high point minus volume at low point)}
\]
**High-Low Method - Calculation of Fixed Costs**
\[
\text{Total cost at the high point:} \quad
\]
\[
\text{Variable costs at the high point:}
\]
- Volume at the high point:
- Variable cost per unit:
\[
\text{Total variable costs at the high point:}
\]
\[
\text{Total fixed costs:}
\]
**Total Cost at the Low Point**
\[
\$64,000.00
\]
**Variable Costs at the Low Point**
- Volume at the low point: 80,000 units sold
- Variable cost per unit:
\[
\text{Total variable costs at the low point:}
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