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
FUND.ACCT.PRIN.-CONNECT ACCESS
- Tundra Tack manufactures horse saddles. In 2015, fixed overhead was applied to products at the rate of $9 per unit. Variable cost per unit remained constant throughout the year. In September 2015, income under variable costing was $195,000. September's beginning and ending inventories were 18,500 and 9,700 units, respectively. a. Calculate income under absorption costing assuming no variances. b. Assume instead that the company's September beginning and ending inventories were 10,200 and 13,800 units, respectively. Calculate income under absorption costing.arrow_forwardWhat is devaneys projected 2019 net income?arrow_forwardGive true answer this financial accounting questionarrow_forward
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