Problem 2-27A (Algo) Estimating fixed and variable cost LO 2-6 Benson Woodcraft Company manufactures "antique" wooden cabinets to house modern televisions. The Company began operations in January of last year. Sidney Myrick, the owner, asks for your assistance. He believes that he needs to better understand the cost of the cabinets for pricing purposes. You have collected the following data concerning actual production over the past year: Number of Cabinets Total Month Produced Cost 840 3,610 1,970 640 January $21,400 32,900 29,600 18,700 28,900 27,200 25,500 31,900 32,400 31,700 32,100 9,800 February March April Мay 1,590 1,320 1,140 1,760 2,340 2,970 3,340 June July August September October November December 310 Required a. To understand the department's cost behavior, you decide to plot the points on graph paper and sketch a total cost line. (1) Enter the number of units and their costs in increasing order. b. Using the high-low method, compute the total cost equation for the preceding data. (1) Compute the variable cost per unit. (2) Compute total fixed costs. (4) Calculate the total cost assuming 1,300 cabinets are made.

Problem 2-27A (Algo) Estimating fixed and variable cost LO 2-6 Benson Woodcraft Company manufactures "antique" wooden cabinets to house modern televisions. The Company began operations in January of last year. Sidney Myrick, the owner, asks for your assistance. He believes that he needs to better understand the cost of the cabinets for pricing purposes. You have collected the following data concerning actual production over the past year: Number of Cabinets Total Month Produced Cost 840 3,610 1,970 640 January $21,400 32,900 29,600 18,700 28,900 27,200 25,500 31,900 32,400 31,700 32,100 9,800 February March April Мay 1,590 1,320 1,140 1,760 2,340 2,970 3,340 June July August September October November December 310 Required a. To understand the department's cost behavior, you decide to plot the points on graph paper and sketch a total cost line. (1) Enter the number of units and their costs in increasing order. b. Using the high-low method, compute the total cost equation for the preceding data. (1) Compute the variable cost per unit. (2) Compute total fixed costs. (4) Calculate the total cost assuming 1,300 cabinets are made.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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