Question 2 Davy Jones Ltd manufacturer of fine china and stoneware is troubled by the fluctuations in productivity and wants to compute how much manufacturing support costs are related to the various sizes of batches of output. The following data show the results of a random sample of 6 batches of one pattern of stoneware: Batch Size 12 18 24 30 36 42 Support Cost/$ 190 220 280 360 380 480 Required: Use the High-Low Method to: (a) Calculate the variable cost per unit. (b) Find the amount of fixed cost present in the cost structure. (c) Develop a cost function/equation that relates total cost to activity levels. (d) Calculate the production level at which total costs is $400.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Question 2
Davy Jones Ltd manufacturer of fine china and stoneware is troubled by the
fluctuations in productivity and wants to compute how much manufacturing support
costs are related to the various sizes of batches of output. The following data show
the results of a random sample of 6 batches of one pattern of stoneware:
Batch Size
Question 3
12
18
24
30
36
42
Support Cost/$
190
220
280
360
380
480
Required:
Use the High-Low Method to:
(a) Calculate the variable cost per unit.
(b) Find the amount of fixed cost present in the cost structure.
(c) Develop a cost function/equation that relates total cost to activity levels.
(d) Calculate the production level at which total costs is $400.
A husinana akansha ita Guad svaduation auashand on the basis af disaat lakas kausa
Transcribed Image Text:This document contains ink, shapes and images that ar... Question 2 Davy Jones Ltd manufacturer of fine china and stoneware is troubled by the fluctuations in productivity and wants to compute how much manufacturing support costs are related to the various sizes of batches of output. The following data show the results of a random sample of 6 batches of one pattern of stoneware: Batch Size Question 3 12 18 24 30 36 42 Support Cost/$ 190 220 280 360 380 480 Required: Use the High-Low Method to: (a) Calculate the variable cost per unit. (b) Find the amount of fixed cost present in the cost structure. (c) Develop a cost function/equation that relates total cost to activity levels. (d) Calculate the production level at which total costs is $400. A husinana akansha ita Guad svaduation auashand on the basis af disaat lakas kausa
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