Answer the following questions using the information below:
Presented below are the production data for the first six months of the year for the mixed costs incurred by Vertise Company.
$$\begin{array} { l r r }
\text { Month } & \text { Cost } & \text { Units } \
\text { January } & \$ 4,890 & 4,100 \
\text { February } & 4,426 & 3,520 \
\text { March } & 6,730 & 5,200 \
\text { April } & 9,724 & 8,250 \
\text { May } & 5,900 & 4,900 \
\text { June } & 7,336 & 6,600
\end{array}$$ Vertise Company uses the high-low method to analyze mixed costs.
-What is the estimated total cost at an operating level of 6,500 units?
A) $7,752.44
B) $7,764.00
C) $7,280.00
D) $7,661.33

Question

Answer the following questions using the information below:
Presented below are the production data for the first six months of the year for the mixed costs incurred by Vertise Company.
 $$\begin{array} { l r r } 
\text { Month } & \text { Cost } & \text { Units } \
\text { January } & \$ 4,890 & 4,100 \
\text { February } & 4,426 & 3,520 \
\text { March } & 6,730 & 5,200 \
\text { April } & 9,724 & 8,250 \
\text { May } & 5,900 & 4,900 \
\text { June } & 7,336 & 6,600
\end{array}$$ Vertise Company uses the high-low method to analyze mixed costs.
-What is the estimated total cost at an operating level of 6,500 units?
A) $7,752.44
B) $7,764.00
C) $7,280.00
D) $7,661.33

Quizplus · Accepted Answer

The high-low method calculates the variable cost per unit and fixed cost using the highest and lowest activity levels. The variable cost per unit is ($9,724 - $4,426) / (8,250 - 3,520) = $1.12. The fixed cost is $9,724 - ($1.12 * 8,250) = $480. The estimated total cost for 6,500 units is ($1.12 * 6,500) + $480 = $7,764.00.

Answer the Following Questions Using the Information Below: Presented Below

Answer the Following Questions Using the Information Below:
Presented Below