Short Answer 1. Given the following data, use the high/low method to determine t

Question

Short Answer 1. Given the following data, use the high/low method to determine the variable cost per inspection and the fixed costs. Prepare the budget equation. onth Number of Ins Overhead Cost $3,42 3,55 3,98 4,04 4,101 4,12 une Due to slower business Meredith takes her daughter with her on all inspections and pays her $40 per inspection. in the cooler months, Meredith estimates she will average 60 inspections per Prepare a schedule showing Meredith 's estimated total cost per inspection. month for the next six months

Explanation / Answer

Budget Equation : y = 14x + $ 2,580.

Schedule for the next six months:

Estimated total cost per inspection = $ ( 840 + 2,400 + 2,580) / 60 = $ 97.

High Low Method:

Variable cost per unit = Change in Overhead Cost / Change in the Number of Inspections

Fixed Cost : $ 2,580

Number of Inspections Variable Costs September 60 840 2,400 2,580 October 60 840 2,400 2,580 November 60 840 2,400 2,580 December 60 840 2,400 2,580 January 60 840 2,400 2,580 February 60 840 2,400 2,580 Totals 5,040 14,400 15,480

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