High-Low Method Ziegler Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows: Units Produced Total Costs 1,650     $189,000   2,960     241,500   4,650     294,000   a.  Determine the variable cost per unit and the total fixed cost. Variable cost: (Round to the nearest dollar.) $ per unit Total fixed cost: $ b.  Based on part (a), estimate the total cost for 2,270 units of production. Total cost for 2,270 units: $

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 7E: High-low method Ziegler Inc. has decided to use the high-low method to estimate the total cost and...
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  1. High-Low Method

    Ziegler Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows:

    Units Produced Total Costs
    1,650     $189,000  
    2,960     241,500  
    4,650     294,000  

    a.  Determine the variable cost per unit and the total fixed cost.

    Variable cost: (Round to the nearest dollar.) $ per unit
    Total fixed cost: $

    b.  Based on part (a), estimate the total cost for 2,270 units of production.

    Total cost for 2,270 units: $
 
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