Question

Check my work Exercise 18-6 Cost behavior estimation-scatter diagram and high-low LO P1 Felix & Co. reports the following information about its units produced and total costs. Period Period Units Produced 0 530 930 1,330 1,730 Total Costs $2,630 3,230 3,830 4,430 5,030 Oo oovo Units Produced 2,130 2,530 2,930 3,330 3,730 Total Costs $5,630 6,230 6,830 7,430 8,598 Estimate total costs if 3,130 units are produced. Complete the below table to calculate the fixed cost and variable cost of sales by using the high-low method.

Answer 1

high low method
Variable cost per unit = (Highest cost - Lowest Cost)/Difference in Units
1.600	per unit
Total cost at high point		8598
Variable cost:
volume	3730
Variable cost per unit	1.6
Total variable cost		5968
Total Fixed costs		2630
Total cost at low point
Variable cost:		2630
volume	0
Variable cost per unit	1.6
Total variable cost		0
Total Fixed costs		2630
Estimated total cost		7638

1 high low method 2 Variable cost per unit = (Highest cost - Lowest Cost)/Difference in Units 3 =(8598-2630)/(3730-0) per unit 4 8598 3730 1.6 =B7*B8 =C5-C9 5 Total cost at high point 6 Variable cost: 7 volume 8 Variable cost per unit 9 Total variable cost 10 Total Fixed costs 11 12 Total cost at low point 13 Variable cost: 14 volume 15 Variable cost per unit 16 Total variable cost 17 Total Fixed costs 18 Estimated total cost 2630 1.6 =B14*B15 =C13-C16 =C17+B15*3130