Question

Felix & Co. reports the following information about its unit sales and cost of sales.

Period		Units Sold				Cost of Sales					Period				Units Sold				Cost of Sales
1			0				$	2,510				6				2,010				$	6,128
2			410					3,248				7				2,410					6,848
3			810					3,968				8				2,810					7,568
4			1,210					4,688				9				3,210					8,288
5			1,610					5,408				10				3,610					9,008

Hint: (Draw an estimated line of cost behavior using a scatter diagram offline.)

Complete the below table to calculate the fixed cost and variable cost of sales by using the high-low method.

High-Low method - Calculation of variable cost per unit

Change in cost- Cost at high point minus cost at low point- ?? - ??

Change in volume- Volume at high point minus volume at low point High-Low method - ?? -??

Calculation of fixed costs

Total cost at the high point

Variable costs at the high point:

Volume at the high point:

Variable cost per unit

Total variable costs at the high point

Total fixed costs

Total cost at the low point Variable costs at the low point:

Volume at the low point:

Variable cost per unit

Total variable costs at the low point

Total fixed costs

Answer 1

Variable cost per unit :

Change in cost	-	Cost at high point minus cost at low point	=	(9008-2510)	=	1.80 per unit
Change in volume	-	Volume at high point minus volume at low point High-Low method	=	(3610-0)	=

Calculation of fixed costs

Total cost at the high point	9008
Variable costs at the high point:
Volume at the high point:	3610
Variable cost per unit	1.80
Total variable costs at the high point (3610*1.8)	6498
Total fixed costs	2510
Total cost at the low point	2510
Variable costs at the low point:
Volume at the low point:	0
Variable cost per unit	1.8
Total variable costs at the low point	0
Total fixed costs	2510