High-Low Biblio Files Company is the chief competitor of Cover-to-Cover Company in the bookshelf business. Biblio Files is analyzing its manufacturing costs, and has compiled the following data for the first six months of the year. After reviewing the data, answer questions (1) through (3) that follow. Units Produced 4,360 units 275 1,000 7,775 1,750 3,015 January February March April May June Total Cost $65,600 6,250 15,000 118,750 32,500 48,000 1. From the data previously provided, help Biblio Files Company estimate the fixed and variable portions of its total costs using the high-low method. Recall that Tutal Costs - (Variable Cost Per Unit x Number of Units Produced) Fixed Cost, Complete the following table. Total Fixed Cost Variable Cost per Unit 4

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
High-Low
Biblio Files Company is the chief competitor of Cover-to-Cover Company in the bookshelf business. Biblio Files is analyzing its manufacturing costs, and has compiled the following
data for the first six months of the year. After reviewing the data, answer questions (1) through (3) that follow.
Units Produced
4,360 units
275
1,000
7,775
1,750
3,015
Total Cost
January
February
March
April
May
June
1. From the data previously provided, help Biblio Files Company estimate the fixed and variable portions of its total costs using the high-low method. Recall that Tutal Costs -
(Variable Cost Per Unit x Number of Units Produced) Fixed Cost, Complete the following table.
Total Fixed Cost
Variable Cost per Unit
$65,600
6,250
15,000
118,750
32,500
48,000
4
Transcribed Image Text:High-Low Biblio Files Company is the chief competitor of Cover-to-Cover Company in the bookshelf business. Biblio Files is analyzing its manufacturing costs, and has compiled the following data for the first six months of the year. After reviewing the data, answer questions (1) through (3) that follow. Units Produced 4,360 units 275 1,000 7,775 1,750 3,015 Total Cost January February March April May June 1. From the data previously provided, help Biblio Files Company estimate the fixed and variable portions of its total costs using the high-low method. Recall that Tutal Costs - (Variable Cost Per Unit x Number of Units Produced) Fixed Cost, Complete the following table. Total Fixed Cost Variable Cost per Unit $65,600 6,250 15,000 118,750 32,500 48,000 4
Expert Solution
Step 1: Introducing High Low Method

 VARIABLE COST 

Variable Cost is a cost that varies with the level of output.

Variable costs include costs of goods sold (COGS), raw materials and inputs to production, packaging, wages, etc.


FIXED COST 

Fixed costs are costs that constant at any level of activity.

fixed costs are rent and lease costs, salaries, utility bills, insurance, loan repayments, Depreciation, Advertisement etc


HIGH LOW METHOD

Under High Low Method Variable Cost Per Unit is Computed :— 

= (Total cost at highest level - Total cost at lowest level) ÷ (Highest level - Lowest level)

steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Risk Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education