Now it's Your Turn! Assignment Exercise 8-1: Analyzing Mixed Costs The Education Coordinator decides that the Community College packs may be unduly influencing the high - low computation. She decides to re-run the results omitting the Community College volume. Required 1. Using the monthly utilization information presented below, and omitting the Community College training packs, find the fixed and variable portion of costs through the high-low method. Note that the college only acquires packs in three months of the year: January, May, and September. These dates coincide with the start dates of their semesters and summer school. 2. The reason the Education Coordinator needs to know how much of the cost is fixed is because she is supposed to collect the appropriate variable cost from the Community College for their packs. For her purposes, which computation do you believe is better? Why? Month Total Number of Training Packs Total Cost Community College Number Packs Community College Cost January 1,000 $ 6,200 200 $1,240 February 200 1,820 March 250 2,350 April 400 3,440 May 700 4,900 300 2,100 June 300 2,730 uly 150 1,470 August 100 nbsp; 1,010 September 1, 100 7,150 300 1,950 October 300 2,850 November 250 2,300 December 100 1,010
Now it's Your Turn! Assignment Exercise 8-1: Analyzing Mixed Costs The Education Coordinator decides that the Community College packs may be unduly influencing the high - low computation. She decides to re-run the results omitting the Community College volume. Required 1. Using the monthly utilization information presented below, and omitting the Community College training packs, find the fixed and variable portion of costs through the high-low method. Note that the college only acquires packs in three months of the year: January, May, and September. These dates coincide with the start dates of their semesters and summer school. 2. The reason the Education Coordinator needs to know how much of the cost is fixed is because she is supposed to collect the appropriate variable cost from the Community College for their packs. For her purposes, which computation do you believe is better? Why? Month Total Number of Training Packs Total Cost Community College Number Packs Community College Cost January 1,000 $ 6,200 200 $1,240 February 200 1,820 March 250 2,350 April 400 3,440 May 700 4,900 300 2,100 June 300 2,730 uly 150 1,470 August 100 nbsp; 1,010 September 1, 100 7,150 300 1,950 October 300 2,850 November 250 2,300 December 100 1,010
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 26BEB: Using High-Low to Calculate Fixed Cost, Calculate the Variable Rate, and Construct a Cost Function...
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Transcribed Image Text:Now it's Your Turn! Assignment Exercise 8-1: Analyzing
Mixed Costs The Education Coordinator decides that
the Community College packs may be unduly
influencing the high - low computation. She decides to
re-run the results omitting the Community College
volume. Required 1. Using the monthly utilization
information presented below, and omitting the
Community College training packs, find the fixed and
variable portion of costs through the high-low method.
Note that the college only acquires packs in three
months of the year: January, May, and September.
These dates coincide with the start dates of their
semesters and summer school. 2. The reason the
Education Coordinator needs to know how much of the
cost is fixed is because she is supposed to collect the
appropriate variable cost from the Community College
for their packs. For her purposes, which computation do
you believe is better? Why? Month Total Number of
Training Packs Total Cost Community College Number
Packs Community College Cost January 1,000 $
6,200 200 $1,240 February 200 1,820 March 250 2,350
April 400 3,440 May 700 4,900 300 2,100 June
300 2,730 uly 150 1,470 August 100 nbsp; 1,010
September 1, 100 7,150 300 1,950 October 300 2,850
November 250 2,300 December 100 1,010
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