Vargis Corporation has a machining capacity of 220,000 hours per year. Utilization of capacity is normally 85%; it has been as low as 30% and as high as 90%. An analysis of the accounting records revealed the following selected costs: At a 30% At a 90% Utilization Utilization Rate Rate Cost A: Total Per hour $460,000 $ $ 460,000 7.50 Cost B: Total Per hour $1,964,000 $ $ 12.80 12.80 Cost C: Total Per hour $1,350,000 $ $780,000 18.50 9.39 Vargis uses the high-low method to analyze cost behavior. Required: A. Classify each of the costs as being either variable, fixed, or semivariable. B. Calculate amounts for the two unknowns in the preceding table. (Round "Cost A" to 2 decimal places.) C. Calculate the total amount that Vargis would expect at a 85% utilization rate for Cost A, Cost B, and Cost C. (Do not round intermediate calculations. Round your final answer to the nearest dollar amount.)

Vargis Corporation has a machining capacity of 220,000 hours per year. Utilization of capacity is normally 85%; it has been as low as 30% and as high as 90%. An analysis of the accounting records revealed the following selected costs: At a 30% At a 90% Utilization Utilization Rate Rate Cost A: Total Per hour $460,000 $ $ 460,000 7.50 Cost B: Total Per hour $1,964,000 $ $ 12.80 12.80 Cost C: Total Per hour $1,350,000 $ $780,000 18.50 9.39 Vargis uses the high-low method to analyze cost behavior. Required: A. Classify each of the costs as being either variable, fixed, or semivariable. B. Calculate amounts for the two unknowns in the preceding table. (Round "Cost A" to 2 decimal places.) C. Calculate the total amount that Vargis would expect at a 85% utilization rate for Cost A, Cost B, and Cost C. (Do not round intermediate calculations. Round your final answer to the nearest dollar amount.)

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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