Bernard Company shows the following manufacturing costs for the first six months of the year: $$\begin{array} { | l | r | r | }
\hline & \text { Production in Units } & \text { Total Costs } \
\hline \text { January } & 1600 & \$ 33,636 \
\hline \text { February } & 1450 & \$ 31,000 \
\hline \text { March } & 1770 & \$ 35,436 \
\hline \text { April } & 2400 & \$ 43,636 \
\hline \text { May } & 2840 & \$ 45,780 \
\hline \text { June } & 2850 & \$ 45,900 \
\hline
\end{array}$$ 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.)

Question

Bernard Company shows the following manufacturing costs for the first six months of the year: $$\begin{array} { | l | r | r | } 
\hline & \text { Production in Units } & \text { Total Costs } \
\hline \text { January } & 1600 & \$ 33,636 \
\hline \text { February } & 1450 & \$ 31,000 \
\hline \text { March } & 1770 & \$ 35,436 \
\hline \text { April } & 2400 & \$ 43,636 \
\hline \text { May } & 2840 & \$ 45,780 \
\hline \text { June } & 2850 & \$ 45,900 \
\hline
\end{array}$$ 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.)

Quizplus · Accepted Answer

The high-low method involves finding the variable cost per unit using the highest and lowest activity levels. The difference in cost between the highest and lowest activity levels is divided by the difference in units produced. Then, fixed costs are calculated by subtracting the total variable costs at either the high or low point from the total costs at that point.1. Identify the highest and lowest production levels:   - Highest: June (2850 units, $45,900)   - Lowest: February (1450 units, $31,000)2. Calculate the variable cost per unit:   - Change in cost = $45,900 - $31,000 = $14,900   - Change in production = 2850 units - 1450 units = 1400 units   - Variable cost per unit = $14,900 / 1400 units = $10.64 per unit3. Calculate total fixed costs:   - Fixed costs = Total costs - (Variable cost per unit * Number of units)   - Using the high point (June): $45,900 - ($10.64 * 2850) = $45,900 - $30,324 = $15,576Therefore, the total fixed costs are approximately $15,576.

Bernard Company Shows the Following Manufacturing Costs for the First