Given the following cost and activity observations for Johnson Company\'s utilit
ID: 2709558 • Letter: G
Question
Given the following cost and activity observations for Johnson Company's utilities, use the high-low method to calculate Johnson's fixed costs per month.
Total Cost
Production
Using the high-low method, determine the variable cost per unit, and the total fixed costs.
Select the correct answer.
A. $38,67 per unit and $88,993 respectively B. $38,23 per unit and $16,015 respectively
C. $38.67 per unit and and $16,015 respectively D.$38,23 per unit and $88,993 respectively
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If fixed costs are $252,631, the unit selling price is $107, and the unit variable costs are $66, what is the break-even sales (units)?
Select the correct answer.
A. 6,162 units B. 66 units C. 2,361 units D. 5,176 units
Total Cost
Production
April $61,276 1,184 May $89,068 1,889 June $105,008 2,328Explanation / Answer
Variable cost per unit:
= (High level cost-Low level cost)÷Difference in production levels
= ($105,008-$61,276)÷(2,328-1,184)
= 38.23 per unit
Fixed costs:
= $61,276-1,184×38.23
= $16,015
Correct option is B
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