Supply costs at Coulthard Corporation's chain of gyms are listed below: Management believes that supply cost is a mixed cost that depends on client-visits.Use the high-low method to estimate the variable and fixed components of this cost.Compute the variable component first, rounding off to the nearest whole cent.Then compute the fixed component, rounding off to the nearest whole dollar.Those estimates are closest to:

Question

Supply costs at Coulthard Corporation's chain of gyms are listed below:   Management believes that supply cost is a mixed cost that depends on client-visits.Use the high-low method to estimate the variable and fixed components of this cost.Compute the variable component first, rounding off to the nearest whole cent.Then compute the fixed component, rounding off to the nearest whole dollar.Those estimates are closest to:

Quizplus · Accepted Answer

11ea7998_5e2d_f00f_911b_e74d079241f9_TB2627_00_TB2627_00 Variable cost per unit = Change in cost ÷ Change in activity
= $464 ÷ 821 client-visits
= $0.57 per client-visit
Fixed cost = Total cost - Variable cost element
= $23,742 - ($0.57 per client-visit × 13,104 client-visits)
= $23,742 - $7,469
= $16,273

Supply Costs at Coulthard Corporation's Chain of Gyms Are Listed