EXERCISE 4 - July 20,500 900,000 August 16,500 700,000...

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EXERCISE 4-5: High-Low Method [LO 2]. Campus Copy & Printing wants to predict copy machine repair expense at different levels of copying activity (number of copies made). The following data have been gathered: Copy Machine Month Repair Expense Copies Made May $ 8,500 300,000 June 12,500 500,000
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Unformatted text preview: July 20,500 900,000 August 16,500 700,000 September 10,500 400,000 Required Determine the fixed and variable components of repair expense using the high-low method. Use copies made as the measure of activity. High low method= 20500-8500/900,000-300000 Variable cost per unit=12000/600000=0.02 $0.02 will be multiplied by any of the activity level Suppose from september 400000*0.02=$8000 Total cost=fixed cost+variable cost Total cost for september=10,500 Vaiable cost=$0.02*400000=$8000 So the fixed cost would be=total cost-variable cost=10,500-8,000=$2,500...
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