The controller of BK Company has requested a quick estimate of the manufacturing supplies that it needs for the month of July when the expected production are 470,000 units. Below are the actual data from the prior three months of operations. March April May Production in units 450,000 540,000 480,000 Manufacturing supplies P 723,060 853,560 766,560 Using these data and high-low method, (Assume that this activity is within the relevant range) compute for the following: a. What is the variable cost per unit? b. How much is the fixed costs? c. What is the reasonable estimate of the cost of manufacturing supplies that would be needed for July?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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The controller of BK Company has requested a quick estimate of the manufacturing supplies that it needs for the
month of July when the expected production are 470,000 units. Below are the actual data from the prior three
months of operations.
March
April
May
Production in units
450,000
540,000
480,000
Manufacturing supplies
P 723,060
853,560
766,560
Using these data and high-low method, (Assume that this activity is within the relevant range) compute for
the following:
a.
What is the variable cost per unit?
b.
How much is the fixed costs?
c. What is the reasonable estimate of the cost of manufacturing supplies that would be needed for July?
Transcribed Image Text:The controller of BK Company has requested a quick estimate of the manufacturing supplies that it needs for the month of July when the expected production are 470,000 units. Below are the actual data from the prior three months of operations. March April May Production in units 450,000 540,000 480,000 Manufacturing supplies P 723,060 853,560 766,560 Using these data and high-low method, (Assume that this activity is within the relevant range) compute for the following: a. What is the variable cost per unit? b. How much is the fixed costs? c. What is the reasonable estimate of the cost of manufacturing supplies that would be needed for July?
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