Estimate total fixed costs per month and the variable cost

Assignment Help Accounting Basics
Reference no: EM133185065

Question - High-Low Method - Castanza Company produces computer printers. Management wants to estimate the cost of production equipment used to produce printers. The company reported the following monthly cost data related to production equipment:

Reporting Period (Month)

Total Costs

Machine Hours

January

$920,000

45,000

February

600,000

25,000

March

500,000

20,000

April

1,100,000

90,000

May

1,140,000

95,000

June

620,000

30,000

July

880,000

38,000

August

910,000

48,000

September

1,060,000

78,000

October

960,000

51,000

November

1,400,000

96,000

December

980,000

54,000

Required -

a. Use the four steps of the high-low method to estimate total fixed costs per month and the variable cost per machine hour. State your results in the cost equation form Y = f + vX by filling in the dollar amounts for f and v.

b. What would Castanza Company's estimated costs be if it used 50,000 machine hours next month?

c. What would Castanza Company's estimated costs be if it used 15,000 machine hours next month? Why should you feel uncomfortable estimating costs for 15,000 machine hours?

Reference no: EM133185065

Questions Cloud

How much is the total financial revenue : The present value of an annuity of 1 in advance at 10% for 8 periods is 5.868. How much is the total financial revenue
Critical Review of Literature : Critical evaluation of the literature: this section may be divided into several sub-sections depending on nature of the research
Determine the sales-volume variance for revenue : Anson Corporation planned to sell one of its products for $150 per unit but actually sold each for $138, Determine the sales-volume variance for revenue
Firms contribute to efficiency of market economy : How do firms contribute to the efficiency of the market economy in ways that networks of independent contractors do not?
Estimate total fixed costs per month and the variable cost : Use the four steps of the high-low method to estimate total fixed costs per month and the variable cost per machine hour
Difference between intrinsic and extrinsic motivation : Describe the difference between intrinsic and extrinsic motivation and give personal examples of each.
Paying interest on reserve balances : Write a analysis of 1 of the following corrective actions taken by the Federal Reserve as a result of the crisis. Paying interest on reserve balances
What is the project payback : Winview Clinic is evaluating a project that costs $52,125 and has expected net cash inflows of $12,000 per year. What is the project payback
Air transportation : Identified these trends regarding when demand for air travel is high or low, we can adjust our 'supply' of flights and crew for those flights accordingly.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd