Blue Wave Corp. has the following data for its monthly unit sales and total costs for the past year. Management wants to use this data to predict future fixed and variable costs: Month Units Sold Total Cost Month Units Sold Total Cost 1 150,000 $90,000 7 180,000 $120,000 12 120,000 $80,000 8 220,000 $140,000 ||3 180,000 $110,000|9 60,000 $50,000 4 200,000 $130,000 10 150,000 $90,000 5 250,000 $160,000 11 90,000 $70,000 6 100,000 $70,000 12 130,000 $95,000 Required: 1. Estimate both the variable cost per unit and the total monthly fixed costs using the high-low method. 2. Use the results from part 1 to predict future total costs when sales volume is (a) 150,000 units and (b) 200,000 units.

Blue Wave Corp. has the following data for its monthly unit sales and total costs for the past year. Management wants to use this data to predict future fixed and variable costs: Month Units Sold Total Cost Month Units Sold Total Cost 1 150,000 $90,000 7 180,000 $120,000 12 120,000 $80,000 8 220,000 $140,000 ||3 180,000 $110,000|9 60,000 $50,000 4 200,000 $130,000 10 150,000 $90,000 5 250,000 $160,000 11 90,000 $70,000 6 100,000 $70,000 12 130,000 $95,000 Required: 1. Estimate both the variable cost per unit and the total monthly fixed costs using the high-low method. 2. Use the results from part 1 to predict future total costs when sales volume is (a) 150,000 units and (b) 200,000 units.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter5: Activity-based Costing And Management

Section: Chapter Questions

Problem 16MCQ: Suppose that a company is spending 60,000 per year for inspecting, 30,000 for purchasing, and 40,000...

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Wellington, Inc., reports the following contribution margin income statement for the month of May. The company has the opportunity to purchase new machinery that will reduce its variable cost per unit by $10 but will increase fixed costs by 20%. Prepare a projected contribution margin income statement for Wellington, Inc., assuming it purchases the new equipment. Assume sales level remains unchanged.
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