GN_ch5 - Exercise 5-1(45 minutes 1 Units Shipped 8 2 6...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Exercise 5-1  (45 minutes) 1. Units Shipped Shipping Expense High activity level 8 $3,600 Low activity level 2   1,500     Change  6 $2,100 Variable cost element: Change in cost $2,100 = =$350 per unit Change in activity 6 units Fixed cost element: Shipping expense at the high activity level. ................... $3,600 Less variable cost element ($350 per unit × 8 units). ....   2,800     Total fixed cost. .............................................................. $ 800 The cost formula is $800 per month plus $350 per unit shipped or Y = $800 + $350X, where X is the number of units shipped. 2. a. See the scattergraph on the following page. b. (Note: Students’ answers will vary due to the imprecision and  subjective nature of this method of estimating variable and fixed  costs.) Total cost at 5 units shipped per month [a point  falling on the line in (a)]. ......................................... $2,600
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 3

GN_ch5 - Exercise 5-1(45 minutes 1 Units Shipped 8 2 6...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online