Hicks Company sells health insurance. It is interested in determining the cost equation for claims processing so it can more accurately budget its claims department. Information for the high and low costs and volumes for last year appear below Month May Activity Cost 100,000 claims $80,000 October 150,000 claims $100,000 Using the high-low method, with claims as to the activity driver, what is the level of fixed costs? a. $60,000 b. $120,000 c. $40,000 d. $0.40 per claim

Hicks Company sells health insurance. It is interested in determining the cost equation for claims processing so it can more accurately budget its claims department. Information for the high and low costs and volumes for last year appear below Month May Activity Cost 100,000 claims $80,000 October 150,000 claims $100,000 Using the high-low method, with claims as to the activity driver, what is the level of fixed costs? a. $60,000 b. $120,000 c. $40,000 d. $0.40 per claim

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 4MCQ: In the cost formula, the term 128,000,000 a. is the total variable cost. b. is the dependent...

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