The table below shows monthly data collected on production costs and on the number ofunits produced over a twelve month period.Total ProductionCosts$230,000Level of Activity(Units Produced)MonthJuly3.500August250,0003,750260,000SeptemberOctober3,800220,0003,400November340,0005,800DecemberJanuaryFebruaryMarch330,0005,500200,0002,900210,0003,300240,0003,600АprilMayJune380,0005,900350,0005,600290,0005,000a) Determine the variable cost per unit and the fixed cost using the high-lowmethod.b) What is the equation of the total mixed cost function?th and thee) In view of the department's cost behaviour pattern, which of the two methodsappear more appropriate? Explain your answer.

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Description: The table below shows monthly data collected on production costs and on the number ofunits produced over a twelve month period.Total ProductionCosts$230,000Level of Activity(Units Produced)MonthJuly3.500August250,0003,750260,000SeptemberOctober3,800

Variable cost per unit as per high low method = Difference in costs/ Difference in units

Business

Accounting

The table below shows monthly data collected on production costs and on the number of units produced over a twelve month period. Month Total Production Costs $230,000 Level of Activity (Units Produced) July 3.500 August 250,000 3,750 260,000 September October 3,800 220,000 3,400 November 340,000 5,800 December 330,000 5.500 January 200,000 2,900 February |March April Мay 210,000 3.300 240,000 3,600 380,000 5,900 350,000 5,600 June 290,000 5,000 a) Determine the variable cost per unit and the fixed cost using the high-low method. b) What is the equation of the total mixed cost function? th and the e) In view of the department's cost behaviour pattern, which of the two methods appear more appropriate? Explain your answer.

The table below shows monthly data collected on production costs and on the number of units produced over a twelve month period. Month Total Production Costs $230,000 Level of Activity (Units Produced) July 3.500 August 250,000 3,750 260,000 September October 3,800 220,000 3,400 November 340,000 5,800 December 330,000 5.500 January 200,000 2,900 February |March April Мay 210,000 3.300 240,000 3,600 380,000 5,900 350,000 5,600 June 290,000 5,000 a) Determine the variable cost per unit and the fixed cost using the high-low method. b) What is the equation of the total mixed cost function? th and the e) In view of the department's cost behaviour pattern, which of the two methods appear more appropriate? Explain your answer.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The table below shows monthly data collected on production costs and on the number of units produced over a twelve month period. Month Total Production cost Lev)el of Activity (Units produce July $230,000 3,500 August 250,000 3,750 Septemer 260,000 3,800 October 220,000 3,400 November 340,000 5,800 December 330,000 5,500 January 200,000 2,900 February 210,000 3,300 March 240,000 3,600 April 380,000 5,900 May 350,000 5,600 June 290,000 5,000 a) Determine the variable cost per unit and the fixed cost using the high-low method.