The high-low method uses
WebZiegler Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows: a. Determine the variable cost per unit and the total fixed cost. b. Based on part (a), estimate the total cost for 1,710 units of production. WebQuestion: High-low method for a service company Sierra Railroad Inc. decided to use the high-low method and operating data from the past six months to estimate the fixed and variable components of transportation costs. The activity base used by Sierra Railroad is "gross-ton miles," which is the total number of tons multiplied by the miles moved.
The high-low method uses
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WebMay 21, 2024 · High-Low method is one of the several mathematical techniques used in managerial accounting to split a mixed cost into its fixed and variable components. Given … The high-low method is an easy way to segregate fixed and variable costs. By only requiring two data values and some algebra, cost accountantscan quickly and easily determine information about cost behavior. Also, the high-low method does not use or require any complex tools or programs. See more The formula for developing a cost model using the high-low method is as follows: Once the variable cost per unit is determined: Fixed cost = Highest activity cost – (Variable cost … See more The manager of a hotel would like to develop a cost model to predict the future costs of running the hotel. Unfortunately, the only available data … See more Thank you for reading CFI’s guide to High-Low Method. To keep advancing your career, the additional CFI resources below will be useful: 1. Cost Behavior Analysis 2. Cost Method 3. … See more Due to the simplicity of using the high-low method to gain insight into the cost-activity relationship, it does not consider small details such as … See more
Web1st step All steps Final answer Step 1/1 High Low Method - Calculation of variable cost per unit View the full answer Final answer Transcribed image text: (1) Use the high-low … WebThe high-low method is a common tool employed to determine what portion of a cost is fixed and what portion of a cost is variable. Small-business owners can use this information to create...
WebThe high -low method uses the highest and lowest costs regardless of whether they are from the data points with the highest and lowest activity levels. True False . Revised Summer 2015 Page 6 of 11 Multiple Choice Questions 1. A mixed cost a) is fixed over a wider range of activity than a step cost.
WebUsing the high-low method, the utilities cost associated with 980 machine hours would be: a) an amount other than those listed above. b) $9,660. C) $9,700. d) $9,790. e) $9.510. Hot'lanta, Inc., which uses the high-low method to analyze cost behavior, has determined that machine hours best explain the company's utilities cost.
WebThe high low method is applied when there is the need to split total costs into its fixed and variable components. The high low method is straightforward to apply, all you have to do … groundwater technical proceduresWebA: A high low method is used to separate the mixed cost into fixed cost and variable cost. In this… Q: Question Content Area High-Low Method The manufacturing costs of Kellam Industries for the first… A: a)Calculation of Variable cost per unit as follows:- = (Highest activity cost – Low activity cost) /… ground water table diagramWebNov 7, 2024 · The high-low method is an accounting technique used to separate fixed and variable costs. Accountants and other financial experts use the high-low financial method … groundwater temperature map texasWebSep 30, 2024 · The high-low method is a simpler method as it involves fewer calculations so long as you have the essential data, including the high and low points. You can also use … groundwater technologyWebThe fact that the high-low method uses only two data points is a major defect of the method. True Job-order costing would be more likely to be used than process costing in … groundwater technicianWebSep 16, 2024 · The Least-Squares regression model is a statistical technique that may be used to estimate a linear total cost function for a mixed cost, based on past cost data. The function can then be used to forecast costs at different activity levels, as part of the budgeting process or to support decision-making processes. groundwater temperature by zip codeWebTranscribed image text: Lark Company, which uses the high-low method, had total costs of $27,340 at its lowest level of activity, when 7,100 units were sold. When, at its highest level of activity, sales equaled 12,900 units, total costs were $39,520. Lark would estimate fixed costs as: Previous question Next question ground water temp chart