General accounting Use the High-Low method to determine the fixed cost component and the variablerate per unit for the following production data:Production Level (units) Total Manufacturing Cost8,0005,000$120,000$90,000

Step 1: Detailed Explanation of High-Low MethodThe high-low method is used to separate mixed costs…

Answered: Use the High-Low method to determine…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 4BE

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High-low method Ziegler Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows: A. Determine the variable cost per unit and the total fixed cost. B. Based on part (B), estimate the total cost for 115,000 units of production.
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Use a cost-volume graph to determine the type of cost behavior exhibited in Groups A, B, and C. In the graph, volume should range from 0 to 24,000 units (in 4,000 unit increments), and cost should range from $0 to $35,000 (in $5,000 increments). Volume Group A Group B Group C (applicable to each group) Costs Costs Costs 2,000 12,000 16,000 20,000 $2,600 $1,000 $2,400 12,600 6,000 2,400 16,600 8,000 2,400 20,600 10,000 2,400 1. Identify the cost behavior (fixed, mixed, or variable) in the three groups. Group Cost behavior A B C 2. What is the expected total cost for Group B if volume is 0? $ 3. What is the expected total cost for Group C if volume is 0? Check
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Use a cost-volume graph to determine the type of cost behavior exhibited in Groups A, B, and C. In the graph, volume should range from 0 to 38, 400 units (in 4,000 unit increments), and cost should range from $0 to $49,000 (in $5,000 increments). Volume Group A Group B Group C (applicable to each group) Costs Costs Costs 3,200 $3,640 $1,400 $ 3,360 19,200 17,640 8,400 3,360 25,600 23,240 11,200 3, 360 32,000 28,840 14,000 3,3601. Identify the cost behavior (fixed, mixed, or variable) in the three groups. Group Cost behavior A B C 2. What is the expected total cost for Group B if volume is 0? $Answer 3. What is the expected total cost for Group C if volume is 0?
Lillibridge & Friends, Incorporated provides you with the following data for its single product: Sales price per unit Fixed costs (per quarter): Selling, general, and administrative (SG&A) Manufacturing overhead Variable costs (per unit): Direct labor Direct materials Manufacturing overhead SG&A Number of units produced per quarter $ 130 1,500,000 4,500,000 a. Prime cost per unit b. Contribution margin per unit c. Gross margin per unit d. Conversion cost per unit e. Variable cost per unit f. Full absorption cost per unit g. Variable production cost per unit h. Full cost per unit Required: Compute the amounts for each of the following assuming that the production levels are within the relevant range if the number of units is 500,000 per quarter. Also calculate if the number of units increases to 600,000 per quarter. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. 16 19 17 13 500,000 units 500,000 units 600,000 units
Lillibridge & Friends, Incorporated provides you with the following data for its single product: Sales price per unit Fixed costs (per quarter): Selling, general, and administrative (SG&A) Manufacturing overhead Variable costs (per unit): Direct labor Direct materials Manufacturing overhead SG&A Number of units produced per quarter Required: $ 60 1,500,000 4,500,000 9 12 10 6 500,000 units Compute the amounts for each of the following assuming that the production levels are within the relevant range if the number of units is 500,000 per quarter. Also calculate if the number of units increases to 600,000 per quarter. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. a. Prime cost per unit b. Contribution margin per unit c. Gross margin per unit d. Conversion cost per unit e. Variable cost per unit f. Full absorption cost per unit g. Variable production cost per unit h. Full cost per unit 500,000 units 600,000 units
The following variable production costs apply to goods made by Fanning Manufacturing Corporation: Item Materials Labor Variable overhead Total Required Determine the total variable production cost, assuming that Fanning makes 10,000, 20,000, or 30,000 units. Units Produced Cost per Unit $10.00 2.50 0.75 $13.25 Total variable cost 10,000 20,000 30,000
What type of cost exhibits the behavior shown below? Manufacturing Volume (Units) Cost Per Unit 50,000 $1.95 70,000 1.95 Select one: a. Discretionary fixed cost b. Step-fixed cost. c. Semivariable cost.d. Variable cost. e. Fixed cost
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A company has developed a production cost equation for its lone product: Y = 30 + 5X, where X is based on the number of labor hours. Assuming a relevant range of 10 to 20 labor hours, what is the estimated production cost at zero (0) labor hour? a. P 30 b. P 80 c. P130 d. The exact amount cannot be determined without additional information
A company's average cost per unit when x units are produced is defined to be Average cost = Total cost x . Suppose a company's average costs are given by Average cost = 6000 x + 35 + 0.2x. Express the average-cost formula as a single fraction. Average cost =

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Use the High-Low method to determine the fixed cost component and the variable rate per unit for the following production data: Production Level (units) Total Manufacturing Cost 8,000 5,000 $120,000 $90,000