s M5-10 (Static) Estimating Cost Behavior Using High-Low Method [LO 5-3]Tan-O-Rama is a local tanning salon. The following information reflects its number of appointments and total costs for the first half ofthe year:MonthJanuaryFebruaryMarchAprilMayJuneNumber ofAppointments250Variable cost per unitTotal fixed cost300500225150175Total Cost$5,0006,0006,1855,3005,4505,230Required:Using the high-low method, calculate the total fixed cost per month and the variable cost per tanning appointment.Note: Round your "Variable cost per unit" answer to 4 decimal places and "Fixed cost" answer to the nearest dollar amount.

Variable cost is a cost which varies with units of production while a fixed cost is a cost which…

Tan-O-Rama is a local tanning salon. The following information reflects its number of appointments and total costs for the first half o the year: Month January February March April May June Number of Appointments 250 300 500 225 Variable cost per unit Total fixed cost 150 175 Total Cost $ 5,000 6,000 6,185 5,300 5,450 5,230 Required: Using the high-low method, calculate the total fixed cost per month and the variable cost per tanning appointment. Note: Round your "Variable cost per unit" answer to 4 decimal places and "Fixed cost" answer to the nearest dollar amount.

Tan-O-Rama is a local tanning salon. The following information reflects its number of appointments and total costs for the first half o the year: Month January February March April May June Number of Appointments 250 300 500 225 Variable cost per unit Total fixed cost 150 175 Total Cost $ 5,000 6,000 6,185 5,300 5,450 5,230 Required: Using the high-low method, calculate the total fixed cost per month and the variable cost per tanning appointment. Note: Round your "Variable cost per unit" answer to 4 decimal places and "Fixed cost" answer to the nearest dollar amount.

FINANCIAL ACCOUNTING

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Author:Libby

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Chapter1: Financial Statements And Business Decisions

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

M5-10 (Static) Estimating Cost Behavior Using High-Low Method [LO 5-3]
Tan-O-Rama is a local tanning salon. The following information reflects its number of appointments and total costs for the first half of
the year:
Month
January
February
March
April
May
June
Number of
Appointments
250
Variable cost per unit
Total fixed cost
300
500
225
150
175
Total Cost
$5,000
6,000
6,185
5,300
5,450
5,230
Required:
Using the high-low method, calculate the total fixed cost per month and the variable cost per tanning appointment.
Note: Round your "Variable cost per unit" answer to 4 decimal places and "Fixed cost" answer to the nearest dollar amount.

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