Harmony Manufacturing collected the following data about its production costs over the past six months: Month Units Produced Total Cost June 1,500 $4,500 July 3,000 $7,500 August 4,200 $9,300 September 2,800 $7,200 October 3,600 $8,400 November 2,000 $5,500 Using the high-low method, the variable cost per unit and total fixed costs are: A. $1.50 per unit, with fixed costs of $2,250 B. $1.78 per unit, with fixed costs of $1,830 C. $2.25 per unit, with fixed costs of $1,500 D. $1.80 per unit, with fixed costs of $2,000

Harmony Manufacturing collected the following data about its production costs over the past six months: Month Units Produced Total Cost June 1,500 $4,500 July 3,000 $7,500 August 4,200 $9,300 September 2,800 $7,200 October 3,600 $8,400 November 2,000 $5,500 Using the high-low method, the variable cost per unit and total fixed costs are: A. $1.50 per unit, with fixed costs of $2,250 B. $1.78 per unit, with fixed costs of $1,830 C. $2.25 per unit, with fixed costs of $1,500 D. $1.80 per unit, with fixed costs of $2,000

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 5EB: Baxter Company has a relevant range of production between 15,000 and 30,000 units. The following...

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Grand Canyon Manufacturing Inc. produces and sells a product with a price of 100 per unit. The following cost data have been prepared for its estimated upper and lower limits of activity: Overhead: Selling and administrative expenses: Required: 1. Classify each cost element as either variable, fixed, or semi-variable. (Hint: Recall that variable expenses must go up in direct proportion to changes in the volume of activity.) 2. Calculate the break-even point in units and dollars. (Hint: First use the high-low method illustrated in Chapter 4 to separate costs into their fixed and variable components.) 3. Prepare a break-even chart. 4. Prepare a contribution income statement, similar in format to the statement appearing on page 540, assuming sales of 5,000 units. 5. Recompute the break-even point in units, assuming that variable costs increase by 20% and fixed costs are reduced by 50,000.
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