Reton Company is reviewing the results of itts production during tthe most recent fiscal year. Due to seasonality of the business, the volume of production fluctuates during the year. Renton would like to analyze the fixed and variable costs for purposes of estimating the budget for the upcoming fiscal year. The cost accountant provided the following data: UNITS PRODUCEDTOTAL COSTJanuary1,100₱12,530February1,20013,260March1,40014,720April1,50015,450May1,80017,640June2,10019,830July2,00019,100August1,90018,370September1,40014,720October1,50015,450November1,30013,990December1,70016,910TOTAL18,900191,970 Required: Calculate the variable cost per unit and the total fixed cost using the following:Average method (compare the two lowest quarters)Graphical methodMethod of least squares

Variable cost is the cost which changes with the change in the output level. Variable cost will not…

Answered: Reton Company is reviewing the results…

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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Reton Company is reviewing the results of itts production during tthe most recent fiscal year. Due to seasonality of the business, the volume of production fluctuates during the year. Renton would like to analyze the fixed and variable costs for purposes of estimating the budget for the upcoming fiscal year. The cost accountant provided the following data:

	UNITS PRODUCED	TOTAL COST
January	1,100	₱12,530
February	1,200	13,260
March	1,400	14,720
April	1,500	15,450
May	1,800	17,640
June	2,100	19,830
July	2,000	19,100
August	1,900	18,370
September	1,400	14,720
October	1,500	15,450
November	1,300	13,990
December	1,700	16,910
TOTAL	18,900	191,970