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Homepage . Piedmont true&returnUrl;:https%3A%2F%2Fconnect.mheducation.com% https/ roblems Exercise 21-6 Cost behavior estimation-scatter diagram and high-low LO P1 Felix & Co. reports the following information about its unit sales and cost of sales s1e 910 1,310 1,710 $2,610 3,210 3,810 4,410 5,010 2,118 2,510 2,91 3,310 3,710 5,610 6,210 6,810 7,410 10,830 ces Hint (Draw an estimated line of cost behavior using a scatter diagram offline.) Complete the below table to calculate the fixed cost and variable cost of sales by using the high-low method. High Low method Calculation of variable cost per unit 420 Variable cost per unit$ 2 00 ,710 Change in volume Volume at high point minus volume at low point method Calculation of fixed costs Total cost at the high point 10,030 00 Varlable costs at the high point Volume at the high point 10, 4 iii Next >

Explanation / Answer

Change in cost / Change in volume = cost at high point minus cost at low point / volume at high point minus volume at low point

= (10,030 - 2,610) / (3,710 - 0)

= 7,420 / 3,710

= 2

Variable cost per unit = 2

Total cost at high volume 10,030 Variable costs at the high point : Volume at the high point * Variable cost per unit 7,420 (3,710 * 2) Fixed costs 2,610 (10,030-7,420)

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