[The following information applies to the questions displayed below.] Felix & Company reports the following information. Period Units Produced Total Costs $ 2,515 3,235 3,955 4,675 5,395 6,115 6,835 7,555 8,275 8,995 2 400 800 1,200 1,600 2,000 2,400 2,800 3,200 3,600 4 7 8 9 10 Exercise 18-5 (Algo) Measuring costs using high-low method LO P1 (1) Use the high-low method to estimate the fixed and variable components of total costs. (2) Estimate total costs if 3,000 units are produced.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
![Use the following information for the Exercises below. (Algo)
[The following information applies to the questions displayed below.]
Felix & Company reports the following information.
Period
1
Units Produced Total Costs
$ 2,515
3,235
3,955
4,675
5,395
6,115
6,835
7,555
8,275
8,995
400
3
800
1,200
1,600
2,000
2,400
2,800
3,200
3,600
6.
7
10
Exercise 18-5 (Algo) Measuring costs using high-low method LO P1
(1) Use the high-low method to estimate the fixed and variable components of total costs.
(2) Estimate total costs if 3,000 units are produced.
Answer is not complete.
High-Low method - Calculation of variable cost per unit
Volume at low point minus volume at high point
Variable cost per
unit =
$
2,515 X
$
1.00
Volume at high point minus volume at low point
2,515
High-Low method - Calculation of fixed costs
Total cost at the high point
$
8,995
Variable costs at the high point
Volume at the high point
2 X units
Variable cost per unit
$
1.00
Total variable costs at the high
point
Total fixed costs
Total cost at the low point
$
2,515
Variable costs at the low point
Volume at the low point
2 X
Variable cost per unit
Total variable costs at the low
point
Total fixed costs
(2) Estimated cost if 3,000 units are produced:
Estimated total cost
$
7,915
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