Fixed Cost Elements Using the High-low Method

Round answer to 0 decimal places eg. ABC Corporation has the following data for use of its machinery.

High Low Method Calculate Variable Cost Per Unit And Fixed Cost

Compute the variable cost per mile using the high-low method.

. Using the low activity cost. 2500 units and 5300 total cost The low level of activity was 1000 units. Select the highest and lowest activity levels and their associated costs.

Round variable cost per mile to 2 decimal places eg. Using either the high or low activity cost should yield approximately the same fixed cost value. Mace Company accumulates the following data concerning a mixed cost using miles as the activity levelMiles DrivenTotal CostJanuary1000015000February800013500March900014400April750012500Compute the variable and fixed cost elements using the high-low method.

Variable costs 8560 044 3766 3745 044 1648 Total fixed costs 1177 1177 Thus maintenance costs are 1177 per month plus 044 per machine hour. B Estimate the total cost if. Total costs Total fixed costs Variable costs Activity level To separate the fixed cost element from the variable cost element the high low method can be used.

30 multiplied by 100 is 3000. June July August September October USAGE. Determine the fixed cost components using the high-low method.

Units labor hours machine hours etc and the corresponding total cost figures high-low method only takes two extreme data. Click card to see definition. Estimate the total cost if the company produces 8100 units.

Hours Cost 35000 185000 August September 40000. Fixed cost 105450 7497 x 1000 30480. The High Low method.

2520 Activity Level High Low Total costs 4943 2825 Less. Using the high activity cost. X Company accumulates the following data about maintenance costs a mixed cost using hours as the activity level.

Activity Level High Low Total costs 4943. Has collected the following data concerning its maintenance costs. Tap card to see definition.

Round answer to 2 decimal places eg. Compute the variable cost per mile using the high-low method. When using the high-low method fixed costs are calculated after variable costs are determined.

Tap again to see term. 15602 123 x 10400 units 2810 or 13560 123 x 8740 2810. Note that our fixed cost differs by.

Based on the above using the high-low method the estimated fixed cost element is 22460 O 10000 32000 None of the above. Given the variable cost per number of guests we can now determine our fixed costs. Round answer to 0 decimal places eg.

Fixed cost 371225 7497 x 4545 3048635. To work out the fixed costs we then multiply the cost per unit of 30 by one of the levels of output. The actual total cost at 100 units is 4000.

High-low Method is used in Accounting to separate fixed and variable cost element from historical cost that is a mixture of both fixed and variable cost and with the use of the high low formula per unit variable cost is measured by subtracting the cost of lowest activity from the cost of highest activity and dividing the resultant amount from the difference of units of highest. 420 500 450 COST. The total cost of a semi-variable cost can be shown as.

Calculated variable cost per unit of 140 High level of activity. Units Produced Total Cost March 9800 14740 April 8500 13250 May 7000 11100 June 7600 12000 July 8100 12460 a Compute the variable and fixed cost elements using the high low method. 225 Variable cost per mile 145 e Textbook and Media Your answer is incorrect.

High-Low method is one of the several mathematical techniques used in managerial accounting to split a mixed cost into its fixed and variable components. Given a set of data pairs of activity levels ie. Fixed Cost 1500 You would use the high-low method to figure out that the variable cost per unit change in total cost high minus low activity level.

15602 123 x 10400 units 2810 or 13560 123 x 8740 2810. Therefore if we subtract 3000 from 4000 this gives the fixed cost of 1000. Variable Cost Per Unit.

We can then check the figures by multiplying 30 cost per unit by 400 units. 5 then you need to figure out the fixed cost high fixed cost - variable cost per unithigh activity level 16500-15100001500. Compute the fixed cost elements using the high-low method.

Fixed costs 15 Textbook and Media. 125 Click again to see term. Byrnes Company accumulates the following data concerning a mixed cost using units produced as the activity level.

Highest Activity Cost Lowest Activity Cost Highest Activity Units Lowest Activity Units. High Low Method provides an easy way to split fixed and variable components of combined costs using the following formula. Compute the fixed cost elements using the high-low method.

P 750 775 550 650 570 Use the high-low method compute the fixed cost element to the nearest whole peso Select one. Answer of Determine variable and fixed cost elements using the high-low method.

High Low Method In Accounting Definition Formula