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Bernard Company shows the following manufacturing costs for the first six months of the year: ​
Production in Units Total Costs
January 1600 $33,636
February 1450 $31,000
March 1770 $35,436
April 2400 $43,636
May 2840 $45,780
June 2850 $45,900
Using the high-low method, the total fixed costs are ______. (Round intermediate calculations to two decimal places, and the final calculation to the nearest dollar.) A. $15,576 B. $14,900 C. $30,324 D. $45,900

Respuesta :

TomShelby

Answer:

A. $15,576

Explanation:

High-Low method:

We calclate the diference betwene the highest level of activity and the lowest. This give us the varaible cost. And with that we solve for fixed cost.

high 2850 45,900

low  1450  31000

diference 1,400 14,900

1400 additional units generated 14,900 cost

so 14,900/1,400 = unit varaible cost = 10.64

June cost = fixed cost + 2,850 x variable cost

45,900 = fixed + 2,850 x 10.64

45,900 - 2,850*10.64

15,576 fixed cost

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