Question
Apply the high-low method of cost analysis to the three cost data groups shown below. Volume...
Apply the high-low method of cost analysis to the three cost data groups shown below.
| Volume (applicable to each group) |
Group A Costs |
Group B Costs |
Group C Costs |
|---|---|---|---|
| 2,000 | $3,900 | $1,500 | $3,600 |
| 12,000 | 18,900 | 9,000 | 3,600 |
| 16,000 | 24,900 | 12,000 | 3,600 |
| 20,000 | 30,900 | 15,000 | 3,600 |
What cost behavior patterns are apparent? Express each as a cost formula: Total cost = Fixed costs + (Variable cost x Volume).
| Group | Fixed costs | + | (Variable cost | x Volume) |
|---|---|---|---|---|
| A | Answer | + | Answer | x Volume |
| B | Answer | + | Answer | x Volume |
| C | Answer | + | Answer | x Volume |
Homework Answers
Answer #1
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