The high Low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity. The computation of variable and fixed cost elements using the high low method.

Question

Want to see the full answer?

Answer 1

Question

Chapter 22, Problem 1PSA

a.

To determine

Concept Introduction:

The high Low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The computation of variable and fixed cost elements using the high low method.

b.

To determine

Concept Introduction:

The high-low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The estimated cost at the activity level is 500 machine hours and is the difference from March’s observed cost for 500 machine hours.

c.

To determine

Concept Introduction:

The high-low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The estimated cost at the activity level is 700 machine hours and its difference from June’s observed cost for 700 machine hours.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Write a linear cost function equation for each of the following conditions. Use y for estimated costsand X for activity of the cost driver. Machine operating costs include $1,000 of maintenance per month, and $15.00 of coolant usagecosts for each day the machinery is in operation.

Data table Month Total Cost Machine Hours January.. 3,420 1,090 February..... S 3,760 1,120 March .... $ 3,532 1,080 April ..... 3,720 1,220 May S 4,800 1,330 June 4,192 1,480 .. %24 %24

Determine fixed and variable costs using the high-low method and prepare graph. E2.26 (LO 3) The controller of Furgee Industries has collected the following monthly expense data for use in analyzing the cost behaviour of maintenance costs. Total Maintenance Costs Total Machine Hours Month January February March April May June $2,500 3,000 3,600 4,500 3,200 4,900 300 350 500 690 400 700 Instructions a. Determine the fixed and variable cost components using the high-low method. b. Prepare a graph showing the behaviour of maintenance costs, and identify the fixed and variable cost components. Use 100-hour increments and $1,000 cost increments.

Answer 2

Question

Chapter 22, Problem 1PSA

a.

To determine

Concept Introduction:

The high Low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The computation of variable and fixed cost elements using the high low method.

b.

To determine

Concept Introduction:

The high-low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The estimated cost at the activity level is 500 machine hours and is the difference from March’s observed cost for 500 machine hours.

c.

To determine

Concept Introduction:

The high-low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The estimated cost at the activity level is 700 machine hours and its difference from June’s observed cost for 700 machine hours.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 22, Problem 1PSA

a.

To determine

Concept Introduction:

The high Low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The computation of variable and fixed cost elements using the high low method.

b.

To determine

Concept Introduction:

The high-low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The estimated cost at the activity level is 500 machine hours and is the difference from March’s observed cost for 500 machine hours.

c.

To determine

Concept Introduction:

The high-low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The estimated cost at the activity level is 700 machine hours and its difference from June’s observed cost for 700 machine hours.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 22, Problem 1PSA

a.

To determine

Concept Introduction:

The high Low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The computation of variable and fixed cost elements using the high low method.

b.

To determine

Concept Introduction:

The high-low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The estimated cost at the activity level is 500 machine hours and is the difference from March’s observed cost for 500 machine hours.

c.

To determine

Concept Introduction:

The high-low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The estimated cost at the activity level is 700 machine hours and its difference from June’s observed cost for 700 machine hours.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 22, Problem 1PSA

a.

To determine

Concept Introduction:

The high Low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The computation of variable and fixed cost elements using the high low method.

b.

To determine

Concept Introduction:

The high-low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The estimated cost at the activity level is 500 machine hours and is the difference from March’s observed cost for 500 machine hours.

c.

To determine

Concept Introduction:

The high-low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The estimated cost at the activity level is 700 machine hours and its difference from June’s observed cost for 700 machine hours.

Answer 6

Chapter 22, Problem 1PSA

a.

To determine

Concept Introduction:

The high Low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The computation of variable and fixed cost elements using the high low method.

Answer 7

Chapter 22, Problem 1PSA

a.

To determine

Concept Introduction:

The high Low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The computation of variable and fixed cost elements using the high low method.

Answer 8

b.

To determine

Concept Introduction:

The high-low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The estimated cost at the activity level is 500 machine hours and is the difference from March’s observed cost for 500 machine hours.

Answer 9

b.

To determine

Concept Introduction:

The high-low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The estimated cost at the activity level is 500 machine hours and is the difference from March’s observed cost for 500 machine hours.

Answer 10

c.

To determine

Concept Introduction:

The high-low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The estimated cost at the activity level is 700 machine hours and its difference from June’s observed cost for 700 machine hours.

Answer 11

c.

To determine

Concept Introduction:

The high-low method is used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at the high and low activity levels. The difference between costs at high and low levels represents variable costs because the variable cost element changes with a change in the level of activity.

The estimated cost at the activity level is 700 machine hours and its difference from June’s observed cost for 700 machine hours.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 15

Ch. 22 - Prob. 1Q Ch. 22 - Prob. 2Q Ch. 22 - Prob. 3Q Ch. 22 - Prob. 4Q Ch. 22 - Prob. 5Q Ch. 22 - Prob. 6Q Ch. 22 - Prob. 7Q Ch. 22 - Prob. 8Q Ch. 22 - 9. “Cost-volume-profit (CVP) analysis is based...Ch. 22 - Prob. 10Q

Solution Summary: The author explains the high-low method used to determine the variable cost and fixed cost from mixed costs by considering the total cost incurred at high and low activity levels.

Concept explainers

Videos

Want to see the full answer?

Chapter 22 Solutions