The following information a available for a company\'s cost of sales over the la

Question

The following information a available for a company's cost of sales over the last five months Using the high-low method, the estimated total fixed cost is: $25,000 $30,000 $13,602 $100,000 $50,000 A cost that changes In proportion to changes n volume of activity is a(n) Differential cost Fixed cost. Incremental cost Variable cost Product cost. A firm sells two products. Regular and Ultra For every unit of Regular the firm, two units of Ultra are sold The firm's total fixed costs are $1.612.000. Selling prices and cost information for both products follow The contribution margin per composite unit is

Explanation / Answer

Q21 Cost at highest level of activity      61,000.00 Cost at Lowest level of activity      31,000.00 Highest level of activity        2,400.00 Lowest Level of activity            400.00 Variable cost per unit = (61,000 - 31,000)/(2,400 - 400) Variable cost per unit = 30,000/2,000 Variable cost per unit = 15 Fixed Costs = 61,000 - 15*2,400 Fixed Costs = 61,000 - 36,000 Fixed Costs = 25,000 Q22 Variable Cost Q23 Particulars Regular Ultra Sp per unit              20.00                        24.00 Cost per unit                 8.00                           4.00 Cont per unit = SP- VC              12.00                        20.00 Cont per composite product = 1*12 + 20*2 = 52

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