The following data have been extracted from the records of Puzzle, Inc.. Februar

Question

The following data have been extracted from the records of Puzzle, Inc.. February 8,800 $19,360 18,584 71,044 August Production level, in units Variable costs Fixed costs Mixed costs Total costs 21,120 33,100 $115,766 Required a. Calculate the missing costs. (Do not round intermediate calculations.) FebruaryAugust 8,800 $ 19,360 21,120 Production level, in units Variable costs Fixed costs Mixed costs Total costs 33,100 18,584 $ 71,044 $115.766 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 13,728 units. (Do not round intermediate calculations.) otal cost d. Identify the two key cost behavior assumptions made in the calculation of your answer to part c evan Cost behavior pattern is ran

Explanation / Answer

1 February August Production level in units 8800 21120 Variable cost 19360 46464 (19360*21120/8800) Fixed cost 33100 33100 Mixed cost 18584 36202 Total costs 71044 115766 2 High low cost method Variable cost per unit = (36202-18584)/(21120-8800) 1.43 Fixed cost (18584- (8800*1.43) 6000 Cost formula = 6000+1.43 per unit 3 Production level in units 13728 Variable cost 30202 (13728*2.2) 2.2 Fixed cost 33100 Mixed cost 25631 (6000+13728*1.43) Total costs 88933

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