You are Capable of Amazing Things (YCAT) is in the process of determining how their costs behave. Cost information for the previous four months is provided below. Month Total Costs Total Units June $92,000 3,300 units July $124,000 4,200 units August $103,000 2,900 units September $118,000 4,500 units YCAT sells each unit for an average unit selling price of $46. Their normal operations are between 2,500 and 5,000 produced units each month. Using the provided information, answer the following questions. Provide the cost behavior equation using the high-low method.What is the October profit if 4,800 units are produced? YCAT estimates that 5,300 units will be produced in October. Can the derived cost behavior equation be accurately used to calculate total costs? Why or why not? Please provide your answer in the box provided below.
You are Capable of Amazing Things (YCAT) is in the process of determining how their costs behave. Cost information for the previous four months is provided below. Month Total Costs Total Units June $92,000 3,300 units July $124,000 4,200 units August $103,000 2,900 units September $118,000 4,500 units YCAT sells each unit for an average unit selling price of $46. Their normal operations are between 2,500 and 5,000 produced units each month. Using the provided information, answer the following questions. Provide the cost behavior equation using the high-low method.What is the October profit if 4,800 units are produced? YCAT estimates that 5,300 units will be produced in October. Can the derived cost behavior equation be accurately used to calculate total costs? Why or why not? Please provide your answer in the box provided below.
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
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 54E: Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects...
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You are Capable of Amazing Things (YCAT) is in the process of determining how their costs behave. Cost information for the previous four months is provided below.
| Month | Total Costs | Total Units |
| June | $92,000 | 3,300 units |
| July | $124,000 | 4,200 units |
| August | $103,000 | 2,900 units |
| September | $118,000 | 4,500 units |
YCAT sells each unit for an average unit selling price of $46. Their normal operations are between 2,500 and 5,000 produced units each month. Using the provided information, answer the following questions.
Provide the cost behavior equation using the high-low method.What is the October profit if 4,800 units are produced? YCAT estimates that 5,300 units will be produced in October. Can the derived cost behavior equation be accurately used to calculate total costs? Why or why not? Please provide your answer in the box provided below.
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