High-Low Method The manufacturing costs of Kellam Industries for the first three months of the year follow: Total Costs January February March Units Produced 2,310 units 3,880 6,510 $219,240 319,360 341,040 Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost. a. Variable cost per unit b. Total fixed cost
High-Low Method The manufacturing costs of Kellam Industries for the first three months of the year follow: Total Costs January February March Units Produced 2,310 units 3,880 6,510 $219,240 319,360 341,040 Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost. a. Variable cost per unit b. Total fixed cost
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High-Low Method
The manufacturing costs of Kellam Industries for the first three months of the year follow:
Total Costs
Units Produced
2,310 units
3,880
6,510
January
$219,240
February
319,360
March
341,040
Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost.
a. Variable cost per unit
b. Total fixed cost
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Step 1: Explanation of High Low Method
The high-low method is a cost analysis technique that identifies variable and fixed costs by comparing the highest and lowest activity levels and their corresponding costs.
It helps determine the cost behavior within a given range of production or activity.
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