Usses the high low method to analyze costs Ferguson Printing, Inc. presently leases a copy machine underan agreement that calls for a fee each month and a charge foreach copy made. Ferguson made 8,500 copies and paid $400 inApril; in June, the firm paid $310 for 6,500 copies. The companyuses the high-low method to analyze costs.Ferguson's variable cost per copy is:A) $0.045B) $0.050C) $0.040D) $0.043E) None of the answers are correct

Explanation of High-Low Method:The High-Low Method is a cost estimation technique used to determine…

Answered: Ferguson Printing, Inc. presently…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

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Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 11EA: Markson and Sons leases a copy machine with terms that include a fixed fee each month plus acharge...

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Markson and Sons leases a copy machine with terms that include a fixed fee each month of $500 plus a charge for each copy made. The company uses the high-low method to analyze costs. If Markson paid $360 for 5,000 copies and $280 for 3,000 copies, how much would Markson pay if it made 7,500 copies?
Able Transport operates a tour bus that they lease with terms that involve a fixed fee each month plus a charge for each mile driven. Able Transport drove the bus 7,000 miles and paid a total of $1,360 in June. In October. Able Transport paid $1,280 for the 5,000 miles driven. If Able Transport uses the high-low method to analyze costs, how much would Able Transport pay in December, if they drove 6,000 miles?
Able Transport operates a tour bus that they lease with terms that involve a fixed fee each month plus a charge for each mile driven. Able Transport drove the tour bus 4,000 miles and paid a total of $1,250 in March. In April, they paid $970 for 3.000 miles. What is the variable cost per mile if Able Transport uses the high-low method to analyze costs?
Cinnamon Depot bakes and sells cinnamon rolls for $1.75 each. The cost of producing 500,000 rolls in the prior year was: At the start of the current year, Cinnamon Depot received a special order for 18,000 rolls to be sold for $1.50 per roll. The company estimates it will incur an additional $1,000 in total fixed costs in order to lease a special machine that forms the rolls in the shape of a heart per the customers request. This order will not affect any of its other operations. Should the company accept the special order? (Show your work.)
Marcotti Cupcakes bakes and sells a basic cupcake for $1.25. The cost of producing 600,000 cupcakes in the prior year was: At the start of the current year, Marcotti received a special order for 15,000 cupcakes to be sold for $1.10 per cupcake. To complete the order, the company must incur an additional $700 in total fixed costs to lease a special machine that will stamp the cupcakes with the customers logo. This order will not affect any of Marcottis other operations and it has excess capacity to fulfill the contract. Should the company accept the special order? (Show your work.)
Markson and Sons leases a copy machine with terms that include a fixed fee each month of $500 plus a charge for each copy made. The company uses the high-low method to analyze costs and Markson paid $360 for 5,000 copies and $280 for 3,000 copies,
Corporate Printing Company currently leases its only copy machine for $1,500 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement, Corporate would pay a commission for its printing at a rate of $20 for every 500 pages printed. The company currently charges $0.20 per page to its customers. The paper used in printing costs the company $0.05 per page and other variable costs, including hourly labor, amount to $0.10 per page. Q. Corporate estimates that the company is equally likely to sell 20,000, 30,000, 40,000, 50,000, or 60,000 pages of print. Using information from the original problem, prepare a table that shows the expected profit at each sales level under the fixed leasing agreement and under the commission-based agreement. What is the expected value of each agreement? Which agreement should Corporate choose?
Corporate Printing Company currently leases its only copy machine for $1,500 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement, Corporate would pay a commission for its printing at a rate of $20 for every 500 pages printed. The company currently charges $0.20 per page to its customers. The paper used in printing costs the company $0.05 per page and other variable costs, including hourly labor, amount to $0.10 per page. Q. What is the company’s breakeven point under the current leasing agreement?
Technical Engineering presently leases a copying machine on a monthly basis. The lease agreement requires a fixed fee each month in addition to a charge per copy. Technical Engineering made 2,400 copies and paid a total of $162 in rent in September and in October they paid $195 for 3,500 copies. Determine Technical Engineering’s variable cost per copy. $0.06 b. $0.04 c. $0.01 d. $0.03
Zena Technology sells arc computer printers for $55 per unit. Unit product costs are: Zena Technology cost data Costs Direct materials Direct labor Manufacturing overhead Amounts $14 20 3 A special order to purchase 15,000 arc printers has recently been received from another company and Zena has idle capacity to fill the order. Zena will incur an additional $2 per printer for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced. When negotiating the price, what is the minimum selling price per unit that Zena should accept for this special order?
Zena Technology sells arc computer printers for $60 per unit. Unit product costs are: Zena Technology cost data Costs Direct materials Direct labor Manufacturing overhead Amounts $12 22 4 A special order to purchase 14,519 arc printers has recently been received from another company and Zena has idle capacity to fill the order. Zena will incur an additional $4 per printer for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced. When negotiating the price, what is the minimum selling price per unit that Zena should accept for this special order? Round to the nearest penny, two decimal places.
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