Question

1.  Company’s high and low level of activity last year was 70000 units of product produced in May and 24000 units produced in November. Machine maintenance costs were $167000 in May and $65800 in November. Using the high-low method, determine an estimate of total maintenance cost for a month in which production is expected to be 54000 units.

2.In applying the high-low method, what is the fixed cost?

Month	Miles	Total Cost
January	88000	$192000
February	54000	120000
March	80000	168000
April	94000	200000

$12000

$32000

$72000

$48000

3.If contribution margin is $70000, sales is $120000, and net income is $50000, then variable and fixed expenses are

4.For Coronado Industries, sales is $2000000, fixed expenses are $405000, and the contribution margin per unit is $60. What is the break-even point?

Answer 1