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What is the variable cost per unit using the high-low method (to two decimal places)? $

What is the variable cost per unit using the high-low method (to two decimal places)? $

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter3: Cost Behavior
Section: Chapter Questions
Problem 23E: Bordner Company manufactures HVAC (heating, ventilation, and air conditioning) systems for...
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The following scenario relates to 5 questions. Bear Co has developed a new model of television. The estimated labour time for the first unit is 12 hours but a learning curve of 75% is expected to apply for the first eight units produced Note: The learning index for a 75% learning curve is -0.415. Overhead production costs must be estimated based on a previous model, the Leonardo, that was made by Bear Co. Production quantities and total overhead costs for the last four months of production of the Leonardo were as follows: Month Output Total overhead cost (units) $ September 1,800 278,200 October 2,000 310,000 November 1,700 252,900 December 200,000 1,000 You have been asked to estimate the variable overhead cost per unit of the new television by assuming that it will be the same as for the Leonardo, using the information provided for the last four months of its manufacture, and applying a 6% inflation rate. What is the variable cost per unit using the high-low method (to two decimal places)? ← Previous Navi
Transcribed Image Text:The following scenario relates to 5 questions. Bear Co has developed a new model of television. The estimated labour time for the first unit is 12 hours but a learning curve of 75% is expected to apply for the first eight units produced Note: The learning index for a 75% learning curve is -0.415. Overhead production costs must be estimated based on a previous model, the Leonardo, that was made by Bear Co. Production quantities and total overhead costs for the last four months of production of the Leonardo were as follows: Month Output Total overhead cost (units) $ September 1,800 278,200 October 2,000 310,000 November 1,700 252,900 December 200,000 1,000 You have been asked to estimate the variable overhead cost per unit of the new television by assuming that it will be the same as for the Leonardo, using the information provided for the last four months of its manufacture, and applying a 6% inflation rate. What is the variable cost per unit using the high-low method (to two decimal places)? ← Previous Navi
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