Variable cost = Change in cost ÷ Change in activity Variable cost = $1,560 ÷ 2,400 machine-hours = $0.65 per machine-hour Fixed cost = Total cost - Variable cost Fixed cost = $4,460 - ($0.65 per machine-hour × 6,000 machine-hours) = $560 AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-05 Analyze a mixed cost using a scattergraph plot and the high-low method. Inspection at one of Iuliano Corporation's factories are listed below: Management believes that inspection cost is a mixed cost that depends on units produced. 161. Using the high-low method, the estimate of the variable component of inspection cost per unit produced is closest to: Variable cost per unit = Change in cost ÷ Change in activity = $840 ÷ 90 units = $9.33 per unit AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-05 Analyze a mixed cost using a scattergraph plot and the high-low method. 162. Using the high-low method, the estimate of the fixed component of inspection cost per month is closest to:
Variable cost = Change in cost ÷ Change in activity Variable cost = $1,560 ÷ 2,400 machine-hours = $0.65 per machine-hour Fixed cost = Total cost - Variable cost Fixed cost = $4,460 - ($0.65 per machine-hour × 6,000 machine-hours) = $560 AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-05 Analyze a mixed cost using a scattergraph plot and the high-low method. Inspection at one of Iuliano Corporation's factories are listed below: Management believes that inspection cost is a mixed cost that depends on units produced. 161. Using the high-low method, the estimate of the variable component of inspection cost per unit produced is closest to: Variable cost per unit = Change in cost ÷ Change in activity = $840 ÷ 90 units = $9.33 per unit AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-05 Analyze a mixed cost using a scattergraph plot and the high-low method. 162. Using the high-low method, the estimate of the fixed component of inspection cost per month is closest to:
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