Alden Co.âs monthly unit sales and total cost data for its operating activities of the past year follow. Management wants to use these data to predict future fixed and variable costs.
Month Units Sold Total Cost Month Units Sold Total Cost 1 318,000 $ 155,500 7 362,000 $ 292,624 2 163,000 99,250 8 268,000 149,750 3 263,000 203,600 9 76,400 67,000 4 203,000 98,000 10 148,000 128,625 5 288,000 199,500 11 92,000 92,000 6 188,000 110,000 12 98,000 83,650 Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method. (Do not round intermediate calculations.)
High-Low method - Calculation of Variable Cost per Sales Dollar Change in cost Cost at high point minus cost at low point $225,624 Variable cost per sales dollar = $0.79 Change in volume Volume at high point minus volume at low point $285,600 High-Low method - Calculation of Fixed Costs Total cost at the high point $292,624.00 Variable costs at the high point: Volume at the high point: 362,000 units sold Variable cost per sales dollar $0.79 Total variable costs at the high point 285,980.00 Total fixed costs Total cost at the low point Variable costs at the low point: Volume at the low point: Variable cost per sales dollar Total variable costs at the low point Total fixed costs
Predict future total costs when sales volume is (a) 376,000 units and (b) 416,000 units.
Predictions Sales (units) 376,000 416,000 Total costs $0 $0
Alden Co.âs monthly unit sales and total cost data for its operating activities of the past year follow. Management wants to use these data to predict future fixed and variable costs.
| Month | Units Sold | Total Cost | Month | Units Sold | Total Cost | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1 | 318,000 | $ | 155,500 | 7 | 362,000 | $ | 292,624 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2 | 163,000 | 99,250 | 8 | 268,000 | 149,750 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3 | 263,000 | 203,600 | 9 | 76,400 | 67,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4 | 203,000 | 98,000 | 10 | 148,000 | 128,625 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5 | 288,000 | 199,500 | 11 | 92,000 | 92,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 6 | 188,000 | 110,000 | 12 | 98,000 | 83,650 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method. (Do not round intermediate calculations.)
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Predict future total costs when sales volume is (a) 376,000 units and (b) 416,000 units.
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Related questions
[The following information applies to the questions displayed below.]
Alden Co.âs monthly unit sales and total cost data for its operating activities of the past year follow. Management wants to use these data to predict future fixed and variable costs.
| Month | Units Sold | Total Cost | Month | Units Sold | Total Cost | |||||||||||||||
| 1 | 319,500 | $ | 157,000 | 7 | 360,500 | $ | 281,644 | |||||||||||||
| 2 | 164,500 | 100,750 | 8 | 269,500 | 151,250 | |||||||||||||||
| 3 | 264,500 | 205,100 | 9 | 76,100 | 65,500 | |||||||||||||||
| 4 | 204,500 | 99,500 | 10 | 149,500 | 130,125 | |||||||||||||||
| 5 | 289,500 | 201,000 | 11 | 93,500 | 93,500 | |||||||||||||||
| 6 | 189,500 | 111,500 | 12 | 99,500 | 82,150 | |||||||||||||||
Problem 21-2A Part 2
2. Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method. (Do not round intermediate calculations.)
[The following information applies to the questions displayed below.]
Alden Co.âs monthly unit sales and total cost data for its operating activities of the past year follow. Management wants to use these data to predict future fixed and variable costs.
| Month | Units Sold | Total Cost | Month | Units Sold | Total Cost | |||||||||||||||
| 1 | 319,500 | $ | 157,000 | 7 | 360,500 | $ | 281,644 | |||||||||||||
| 2 | 164,500 | 100,750 | 8 | 269,500 | 151,250 | |||||||||||||||
| 3 | 264,500 | 205,100 | 9 | 76,100 | 65,500 | |||||||||||||||
| 4 | 204,500 | 99,500 | 10 | 149,500 | 130,125 | |||||||||||||||
| 5 | 289,500 | 201,000 | 11 | 93,500 | 93,500 | |||||||||||||||
| 6 | 189,500 | 111,500 | 12 | 99,500 | 82,150 | |||||||||||||||
Problem 21-2A Part 3
3. Predict future total costs when sales volume is (a) 379,000 units and (b) 419,000 units.
The following information applies to the questions displayed below.]
Praveen Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding, that has not been as profitable as planned. Since Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next yearâs plans call for a $290 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $313,200, up to a maximum capacity of 550,000 yards of rope. Forecasted variable costs are $203 per 100 yards of XT rope.
Problem 21-3A Part 1
1. Estimate Product XTâs break-even point in terms of sales units and sales dollars. (1 unit = 100 yards) (Do not round intermediate calculations.)
[The following information applies to the questions displayed below.]
Praveen Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding, that has not been as profitable as planned. Since Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next yearâs plans call for a $290 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $313,200, up to a maximum capacity of 550,000 yards of rope. Forecasted variable costs are $203 per 100 yards of XT rope.
Problem 21-3A Part 2
3. Prepare a contribution margin income statement showing sales, variable costs, and fixed costs for Product XT at the break-even point.
