Vernon Boat Company makes inexpensive aluminum fishing boats. Production is seasonal, with considerable activity occurring in the spring and summer. Sales and production tend to decline in the fall and winter months. During year 2, the high point in activity occurred in June when it produced 205 boats at a total cost of $163,890. The low point in production occurred in January when it produced 38 boats at a total cost of $52,000. Required a. Use the high-low method to estimate the amount of fixed cost incurred each month by Vernon Boat Company. b. Determine the total estimated cost if 110 boats are made. a. Fixed cost b. Total estimated cost
Vernon Boat Company makes inexpensive aluminum fishing boats. Production is seasonal, with considerable activity occurring in the spring and summer. Sales and production tend to decline in the fall and winter months. During year 2, the high point in activity occurred in June when it produced 205 boats at a total cost of $163,890. The low point in production occurred in January when it produced 38 boats at a total cost of $52,000. Required a. Use the high-low method to estimate the amount of fixed cost incurred each month by Vernon Boat Company. b. Determine the total estimated cost if 110 boats are made. a. Fixed cost b. Total estimated cost
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter8: Tactical Decision-making And Relevant Analysis
Section: Chapter Questions
Problem 54P
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![Vernon Boat Company makes inexpensive aluminum fishing boats.
Production is seasonal, with considerable activity occurring in the
spring and summer. Sales and production tend to decline in the fall and
winter months. During year 2, the high point in activity occurred in June
when it produced 205 boats at a total cost of $163,890. The low point
in production occurred in January when it produced 38 boats at a total
cost of $52,000.
Required
a. Use the high-low method to estimate the amount of fixed cost
incurred each month by Vernon Boat Company.
b. Determine the total estimated cost if 110 boats are made.
a. Fixed cost
b. Total estimated cost](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F089b9af0-2e6c-4067-9f0c-f45298961db0%2Fe91cfa61-405e-476a-8ced-8ebe7873fa1d%2F1vznozm_processed.png&w=3840&q=75)
Transcribed Image Text:Vernon Boat Company makes inexpensive aluminum fishing boats.
Production is seasonal, with considerable activity occurring in the
spring and summer. Sales and production tend to decline in the fall and
winter months. During year 2, the high point in activity occurred in June
when it produced 205 boats at a total cost of $163,890. The low point
in production occurred in January when it produced 38 boats at a total
cost of $52,000.
Required
a. Use the high-low method to estimate the amount of fixed cost
incurred each month by Vernon Boat Company.
b. Determine the total estimated cost if 110 boats are made.
a. Fixed cost
b. Total estimated cost
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