To better understand its cost structure, the company has recently appointed an external consultant to analyze its costs and identify the variable cost per seminar and the total fixed cost per month. In the preliminary meeting, the external consultant told the company's management that variable cost per seminar and total fixed cost per month could be calculated by using the high-low method as well as the least-square regression method. The company's management said that they want to see results in both methods and wonder whether and why the results might differ between these two methods. The company also wants to know the total costs for delivering 28 seminars in July.
To better understand its cost structure, the company has recently appointed an external consultant to analyze its costs and identify the variable cost per seminar and the total fixed cost per month. In the preliminary meeting, the external consultant told the company's management that variable cost per seminar and total fixed cost per month could be calculated by using the high-low method as well as the least-square regression method. The company's management said that they want to see results in both methods and wonder whether and why the results might differ between these two methods. The company also wants to know the total costs for delivering 28 seminars in July.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Bright Professional Limited provides continuing professional education for accounting and finance
professionals. The company is relatively new and management is seeking information regarding the
company's cost structure. The following information has been gathered for the first six months of the
current year:
January
February
March
April
May
June
Seminars
offered
8
10
13
16
14
11
cost incurred
$
15,200
17,000
19,400
21,800
20,000
18,200
To better understand its cost structure, the company has recently appointed an external consultant to
analyze its costs and identify the variable cost per seminar and the total fixed cost per month. In the
preliminary meeting, the external consultant told the company's management that variable cost per
seminar and total fixed cost per month could be calculated by using the high-low method as well as the
least-square regression method. The company's management said that they want to see results in both
methods and wonder whether and why the results might differ between these two methods. The
company also wants to know the total costs for delivering 28 seminars in July.
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