Accounting homework problem high-low method

Posted on 2014-03-25 07:42:00 in Accounting by TEHAPPLE

im having problems completing this homework question



6. Gabel Industries has collected the following data in order to analyize the behavior of their costs:



month, units produced, total cost:

January, 8750, 40500

February, 13750, 41500

march, 12500, 45000

april, 17500, 41500

may, 23750, 45500

june, 11500, 38500



a. Using the high-low method, calculate the variable cost per unit and estimated fixed costs.

b. Using the resulting relationship, predict the costs if they produce 18,500 units in a future period.

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