COST ACCOUNTING
COST BEHAVIORS
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Question
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USING HIGH-LOW DATA:Find the variable cost per unit and fixed costs (in total) for 7, 000 units of production.A semi-variable cost totals £26000 when 5, 000 units are made and totals £38, 000 when 9, 000 units are made.
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Variable cost per unit £2.40 x 7, 000 = £16, 800Fixed cost in total £12, 000Total cost for 7, 000 units £28, 800
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Variable cost per unit £3.00 x 7, 000 = £21, 000Fixed cost in total £11, 000Total cost for 7, 000 units £32, 000
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Variable cost per unit £3.00 x 7, 000 = £21, 000Fixed cost in total £12, 000Total cost for 7, 000 units £33, 000
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Explanation:
Detailed explanation-1: -The formula for the High-Low Method It is calculated by deducting the product of variable cost per unit and the highest activity units from the highest activity cost or by deducting the product of variable cost per unit and lowest activity units from the lowest activity cost.
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