Question - High-low method-missing amounts
The following data have been extracted from the records of Puzzle, Inc.:
|
|
February
|
August
|
|
Production level, in units
|
12,000
|
$18,000
|
|
Variable costs
|
$21,000
|
$ ?
|
|
Fixed costs
|
?
|
31,000
|
|
Mixed costs
|
18,000
|
?
|
|
Total costs
|
$70,000
|
$88,000
|
Required -
a. Calculate the missing costs
b. Calculate the cost formula for mixed cost using the high-low method.
c. Calculate the total cost that would be incurred for the production of 20,000 units.
d. Identify the two key cost behavior assumptions made in the calculation of your answer to part c.