ACC 406 Lecture : Cost Behaviour
Get access
Related Documents
Related Questions
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.)
|
Predict future total costs when sales volume is (a) 376,000 units and (b) 416,000 units.
|
Shatner Inc. has decided to use the high-low method to estimatethe total cost and the fixed and variable cost components of thetotal cost. The data for various levels of production are asfollows:
UnitsProduced | TotalCosts | ||
7,040 | $ 394,240 | ||
4,550 | 259,070 | ||
2,640 | 253,440 |
a. Determine the variable cost per unit and thefixed cost.
Variable cost per unit | $ |
Fixed cost | $ |
b. Based on part (a), estimate the total costfor 3,480 units of production.
$
The following data have been extracted from the records of Puzzle, Inc.:
February | August | ||||||
Production level, in units | 11,800 | 25,960 | |||||
Variable costs | $ | 33,040 | $ | ? | |||
Fixed costs | ? | 32,500 | |||||
Mixed costs | 29,120 | ? | |||||
Total costs | $ | 94,660 | $ | 161,212 | |||
Required:
a. Calculate the missing costs. (Do not round intermediate calculations.)
b. Calculate the cost formula for mixed cost using the high-low method. (Do not round intermediate calculations. Round "Variable cost" to 2 decimal places.)
cost formula _____ + _____ per unit
c. Calculate the total cost that would be incurred for the production of 16,949 units. (Do not round intermediate calculations.)
Total cost ____
d. Identify the two key cost behavior assumptions made in the calculation of your answer to part c.
cost behavior pattern is ____ relevant range ____