total cost were 78500 when 28000 units were produced and 97800 when 36000 units

Question

total cost were 78500 when 28000 units were produced and 97800 when 36000 units were produced. use the high-low method to find the estimate total cost for the production level of 32000 units. b.susan is trying to decide whether/ not to attend college during the next 12 week session. she has the following options A. attend college full time at the cost of 1200 B. attend college part time at a cost of 600 and work part time earning 1700 C. work full time earning 4700. what is susans incremental profit if she chooses options 3 over 2?

Explanation / Answer

Cost at highest level of activity            97,800.00 Cost at Lowest level of activity            78,500.00 Highest level of activity            36,000.00 Lowest Level of activity            28,000.00 Variable cost per unit = (97,800-78,500)/(36,000-28,000) Variable cost per unit = 19,300/8000 Variable cost per unit = 2.4125 Variable costs = 28000*2.4125 Variable costs = 67,550 Fixed Costs= 78,500 - 67,550 = $10,950 When 32,000 Units are Produced Costs = 10,950 + 2.4125*32000 Costs = 10,950 + 77,200 Costs = 88,150 Particulars Option2 Option3 Incremental Earnings                 1,700.00            4,700.00                      3,000.00 Cost                (600.00)                          600.00 Net Earnings               1,100.00            4,700.00                      3,600.00

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.