Concept Introduction:
Cost Volume Profit (CVP) Analysis:
The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.
High-low method involves finding out the variable cost for a company using highest price and lowest price within a range of period for which the data is collected.
The formula that is used here is-
Variable cost per unit = (High Price- Low price)/ (Change in no. of units)
Requirement-1:
To Calculate:
The Variable cost per unit and Total Fixed Costs using the high low method
Concept Introduction:
Cost Volume Profit (CVP) Analysis:
The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.
High-low method involves finding out the variable cost for a company using highest price and lowest price within a range of period for which the data is collected.
The formula that is used here is-
Variable cost per unit = (High Price- Low price)/ (Change in no. of units)
Requirement-2:
To Calculate:
The total cost at the given level of units
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Chapter 21 Solutions
FUNDAMENTAL ACCOUNTING PRINCIPLES
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