igh-Low Method to Determine Fixed Cost and Variable Rate Dohini Manufacturing Company had the following 12 months of data on purchasing cost and number of purchase orders. Number of Purchasing Purchase Month January February March April May June July August September October November December Cost $18,860 18.040 19,250 18,050 19,345 19,500 19,670 21.040 19,430 20,020 18,800 19,340 Orders 370 320 370 410 400 450 460 570 440 500 470 480 Required: 1. If Dohini Manufacturing Company estimates that next month will have 420 purchase orders, what is the total estimated purchasing cost for that month? 2. What if Dohini Manufacturing wants to estimate purchasing cost for the coming year and expects 5,330 purchase orders? What will estimated total purchasing cost be? 3. What is the total fixed purchasing cost? 4. Why doesn't it equal the fixed cost calculated in Requirement 3 above?
igh-Low Method to Determine Fixed Cost and Variable Rate Dohini Manufacturing Company had the following 12 months of data on purchasing cost and number of purchase orders. Number of Purchasing Purchase Month January February March April May June July August September October November December Cost $18,860 18.040 19,250 18,050 19,345 19,500 19,670 21.040 19,430 20,020 18,800 19,340 Orders 370 320 370 410 400 450 460 570 440 500 470 480 Required: 1. If Dohini Manufacturing Company estimates that next month will have 420 purchase orders, what is the total estimated purchasing cost for that month? 2. What if Dohini Manufacturing wants to estimate purchasing cost for the coming year and expects 5,330 purchase orders? What will estimated total purchasing cost be? 3. What is the total fixed purchasing cost? 4. Why doesn't it equal the fixed cost calculated in Requirement 3 above?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
High-Low Method to Determine Fixed Cost and Variable Rate
Dohini Manufacturing Company had the following 12 months of data on purchasing cost and number of purchase orders.
Number of
Purchasing
Purchase
Month
January
February
March
April
May
June
July
August
September
October
November
December
Cost
$18,860
18.040
19,250
18,050
19,345
19,500
19,670
21.040
19,430
20,020
18,800
19,340
Orders
370
320
370
410
400
450
460
570
440
500
470
480
Required:
1. If Dohini Manufacturing Company estimates that next month will have 420 purchase orders, what is the total estimated purchasing cost for that month?
2. What if Dohini Manufacturing wants to estimate purchasing cost for the coming year and expects 5,330 purchase orders? What will estimated total purchasing cost be?
3. What is the total fixed purchasing cost?
4. Why doesn't it equal the fixed cost calculated in Requirement 3 above?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education