Accurate Answer Crawford Industries, which uses the high-low method of estimating costs, reportedtotal costs of $30 per unit when productionwas at its lowest level, at 12,000 units.When production doubled to its highestlevel, the total cost per unit dropped to $18.Crawford would estimate the variable costper unit?

Explanation of High-Low Method:The high-low method is a technique used to estimate fixed and…

Answered: Crawford Industries, which uses the…

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

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 16DQ

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Cardinal uses the high-low method of estimating costs. Cardinal had total costs of $26,450 at its lowest level of activity, when 7,100 units were sold. When, at its highest level of activity, sales equaled 12,700 units, total costs were $39,890. What would be the estimated variable cost per unit be?
Abdulwahab Corporation is estimating the cost function for total cost of production of product A using the high-low method. The data collected for the past year is as following: Number of units Total Quarter produced Costs 1 4,000 $ 1,000 2 5,400 1,280 3 7,000 1,600 4 9,000 2,000 Calculate the following amounts: The variable cost per unit The fixed cost Explain the method used by the company to estimate the cost function. Suggest other methods than may be used to estimate cost function.
Sierra Company produces its product at a total cost of $120 per unit. Of this amount, $40 per unit is selling and administrative costs. The total variable cost is $96 per unit, and the desired profit is $24.00 per unit. Determine the markup percentage using the (a) total cost, (b) product cost, and (c) variable cost methods. Round your answers to one decimal place. a. Total cost b. Product cost c. Variable cost % % %
Management believes it can sell a new product for $6.50. The fixed costs of production are estimated to be $5,500, and the variable costs are $2.50 a unit. Complete the following table at the given levels of output and the relationships between quantity and fixed costs, quantity and variable costs, and quantity and total costs. Round your answers to the nearest dollar. Enter zero if necessary. Use a minus sign to enter losses, if any. Quantity Total Revenue Variable Costs Fixed Costs Total Costs Profits (Losses) 0 $ $ $ $ $ 500 $ $ $ $ $ 1,000 $ $ $ $ $ 1,500 $ $ $ $ $ 2,000 $ $ $ $ $ 2,500 $ $ $ $ $ 3,000 $ $ $ $ $ Determine the break-even level using the above table and use the Exhibit 19.5 to confirm the break-even level of output. Round your answers for the break-even level to the nearest whole number. Round your answers for the fixed costs, variable costs, total costs,…
Ziegler Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows: Units Produced Total Costs 1,400 $302,400 2,740 425,040 4,200 470,400 a. Determine the variable cost per unit and the total fixed cost. Variable cost: (Round to the nearest dollar.) $fill in the blank 1 per unit Total fixed cost: $fill in the blank 2 b. Based on part (a), estimate the total cost for 2,020 units of production. Total cost for 2,020 units: $fill in the blank 3
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Pavilion Company is using the high-low method to determine the fixed and variable components of its utilities expense, a semivariable cost. Pavilion Company believes direct labor hours is the best activity to measure the cost. In its low month, there were 1,600 direct labor hours and utilities expense was $8,000. In its high month, there were 3,600 direct labor hours and utilities expense was $12,000. Using the high-low method, what is the variable cost per direct labor hour, rounded to the nearest cent? $0.77 $2.00 $3.33 $5.00
units?
Tashiro Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows: Units Produced Total Costs 60,000 $19,200,000 69,000 20,010,000 90,000 24,090,000 a. Determine the variable cost per unit and the total fixed cost. Variable cost (Round to two decimal places.) $fill in the blank 1 per unit Total fixed cost $fill in the blank 2 b. Based on part (a), estimate the total cost for 86,000 units of production. Total cost for 86,000 units $fill in the blank 3
F Company, which uses the high-low method, reported total costs of $24 per unit at its lowest activity level, when production equaled 10,000 units. When production doubled, at its highest activity level, the total cost per unit dropped to $15. Foster would estimate variable cost per unit as
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