Rooney Boat Company makes inexpensive aluminum fishing boats. Production is seasonal, with considerable activity occurring in the spring and summer. Sales and production tend to decline in the fall and winter months. During year 2, the high point in activity occurred in June when it produced 203 boats at a total cost of $157,530. The low point in production occurred in January when it produced 30 boats at a total cost of $52,000. Required a. Use the high-low method to estimate the amount of fixed cost incurred each month by Rooney Boat Company. b. Determine the total estimated cost if 170 boats are made. Fixed cost
Rooney Boat Company makes inexpensive aluminum fishing boats. Production is seasonal, with considerable activity occurring in the spring and summer. Sales and production tend to decline in the fall and winter months. During year 2, the high point in activity occurred in June when it produced 203 boats at a total cost of $157,530. The low point in production occurred in January when it produced 30 boats at a total cost of $52,000. Required a. Use the high-low method to estimate the amount of fixed cost incurred each month by Rooney Boat Company. b. Determine the total estimated cost if 170 boats are made. Fixed cost
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
Chapter8: Tactical Decision-making And Relevant Analysis
Section: Chapter Questions
Problem 54P
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Question
![Rooney Boat Company makes inexpensive aluminum fishing boats. Production is seasonal, with considerable activity occurring in the
spring and summer. Sales and production tend to decline in the fall and winter months. During year 2, the high point in activity
occurred in June when it produced 203 boats at a total cost of $157,530. The low point in production occurred in January when it
produced 30 boats at a total cost of $52,000.
Required
a. Use the high-low method to estimate the amount of fixed cost incurred each month by Rooney Boat Company.
b. Determine the total estimated cost if 170 boats are made.
a.
b.
Fixed cost
Total estimated cost](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcbd39068-0df6-4fe6-b3a5-23dec728eb37%2Fbc68aacd-adda-44ef-beaf-bfdb37634980%2Fd55ar4j_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Rooney Boat Company makes inexpensive aluminum fishing boats. Production is seasonal, with considerable activity occurring in the
spring and summer. Sales and production tend to decline in the fall and winter months. During year 2, the high point in activity
occurred in June when it produced 203 boats at a total cost of $157,530. The low point in production occurred in January when it
produced 30 boats at a total cost of $52,000.
Required
a. Use the high-low method to estimate the amount of fixed cost incurred each month by Rooney Boat Company.
b. Determine the total estimated cost if 170 boats are made.
a.
b.
Fixed cost
Total estimated cost
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