Summit Manufacturing wants to estimate their total cost and the fixed and variable cost components using the high-low method. The data for various production levels are: Units Produced Total Costs 2,100 4,500 6,800 $285,000 $395,000 $482,000 a. Determine the variable cost per unit and the total fixed cost. b. Based on part (a), estimate the total cost for 3,200 units of production.

Summit Manufacturing wants to estimate their total cost and the fixed and variable cost components using the high-low method. The data for various production levels are: Units Produced Total Costs 2,100 4,500 6,800 $285,000 $395,000 $482,000 a. Determine the variable cost per unit and the total fixed cost. b. Based on part (a), estimate the total cost for 3,200 units of production.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 7E: High-low method Ziegler Inc. has decided to use the high-low method to estimate the total cost and...

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Lillibridge & Friends, Incorporated provides you with the following data for its single product: Sales price per unit Fixed costs (per quarter): Selling, general, and administrative (SG&A) Manufacturing overhead Variable costs (per unit): Direct labor Direct materials Manufacturing overhead SG&A Number of units produced per quarter a. Prime cost per unit b. Contribution margin per unit c. Gross margin per unit d. Conversion cost per unit e. Variable cost per unit Required: Compute the amounts for each of the following assuming that the production levels are within the relevant range if the number of units is 500,000 per quarter. Also calculate if the number of units increases to 600,000 per quarter. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. f. Full absorption cost per unit g. Variable production cost per unit h. Full cost per unit $ 140 1,500,000 4,500,000 $ 17 20 18 14 500,000 units 500,000 units 600,000 units 37.00 $ $ 37.00 55.00 $ 55.00
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For each of the four situations, calculate the cost basis per device based on the information shown above. (Round intermediate calculations and final answers to 2 decimal places.) A. Only the differential production costs could be considered as the cost basis. B. The total cost per device for normal production of 60,000 devices could be used as the cost basis. C. The total cost per device for productions of 66,000 devices, excluding marketing costs, could be used as the cost basis. D. The total cost per device for production of 66,000 devices, including marketing costs, could be used as the cost basis.