Question 5 (1 point) X Company determined the following monthly cost formula usi

Question

Question 5 (1 point) X Company determined the following monthly cost formula using the high-low method for semivariable cost, Total Cost = $2.00 per machine hour + $30,000 per month Compute the total cost for a month with 20,000 machine hours. Do not enter dollar signs or commas. For example, enter $10,000 as 10000 Save Question 6 (1 point) X Company has the following costs for the year. Month FebruaryY March April May Units Produced Total Cost $710,000 665,000 670,000 680,000 695,000 10,600 6,300 6,800 7,300 9,100 9,600 698,000 uly August September October 12,000 9,200 9,300 8,500 12,300 11,800 840,000 685,000 690,100 702,000 725,000 730,000 December using the High-Low method, compute the variable cost per unit. Do not enter dollar signs or commas. Round to the nearest dollar. For example enter $22.65 as 23 Save

Explanation / Answer

Solution 5:

Total machine hours = 20000

Total cost = 2*20000 + 30000 = 50000

Solution 6:

High level activity and cost = 12300 units, cost = 725000

Low level activity and cost = 6300 units, cost = 665000

Variable cost per unit (High low method) = (Total cost at high level - Total cost at low level) / (High level acitivity - low level activity)

= (725000 - 665000) / (12300 - 6300) = 10 per unit

Solution 7:

Fixed cost per unit = Total cost - varaible cost

Total cost at 6300 units = 665000

variable cost per unit as computed in Solution 6 = 10 per unit

Fixed cost = 665000 - (6300*10) = 602000

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