Concept explainers
a.
Concept Introduction:
The high Low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.
The computation of variable and fixed cost elements using the high low method.
b.
Concept Introduction:
The high-low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.
The estimated cost at the activity level is 500 machine hours and is the difference from March’s observed cost for 500 machine hours.
c.
Concept Introduction:
The high-low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.
The estimated cost at the activity level is 700 machine hours and its difference from June’s observed cost for 700 machine hours.

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Chapter 22 Solutions
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