Cost Management: A Strategic Emphasis 7th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 10

Williams Inc. produces fluorescent lightbulbs for commercial use. The accounting manager is attempting to estimate the total cost for the next quarter using the high-low method. He has compiled data and found the high and low costs are $10,000 and $6,000, respectively, and the associated cost drivers are 7,000 and 3,000 packs, respectively. He has also determined the variable cost to be $1.00 per pack. What is the value for a (the fixed quantity)