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Nova Insurance 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 March Claims Processed Activity Cost ($) 120,000 September 180,000 90,000 120,000 Using the high-low method, with claims as the activity driver, what is the level of fixed costs? a. $60,000 b. $90,000 c. $30,000 d. $0.50 per claim

Nova Insurance 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 March Claims Processed Activity Cost ($) 120,000 September 180,000 90,000 120,000 Using the high-low method, with claims as the activity driver, what is the level of fixed costs? a. $60,000 b. $90,000 c. $30,000 d. $0.50 per claim

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 9EB: The cost data for BC Billing Solutions for the year 2020 is as follows: Using the high-low method,...
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What is the level of fixed costs?

Nova Insurance 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 March Claims Processed Activity Cost ($) 120,000 September 180,000 90,000 120,000 Using the high-low method, with claims as the activity driver, what is the level of fixed costs? a. $60,000 b. $90,000 c. $30,000 d. $0.50 per claim
Transcribed Image Text:Nova Insurance sells health insurance. It is interested in determining the cost equation for claims processing so it can more accurately budget its claims department. Information for the high and low costs and volumes for last year appear below: Month March Claims Processed Activity Cost ($) 120,000 September 180,000 90,000 120,000 Using the high-low method, with claims as the activity driver, what is the level of fixed costs? a. $60,000 b. $90,000 c. $30,000 d. $0.50 per claim
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