Given the following cost and activity observations for Smithson Company’s utilities, use the high-low method
to calculate Smithson’s fixed costs per month. Round variable cost per unit to two decimal places in your
The manufacturing cost of Prancer Industries for three months of the year are provided below:
Using the high-low method, the variable cost per unit, and the total fixed costs are:
$32.30 per unit and $77,520
$33 per unit and $21,100 respectively.
$32 per unit and $76,800 respectively.
$32.30 per unit and $22,780
Cool-It Company manufactures and sells commercial air conditioners. Because of current trends, it expects to
increase sales by 15 percent next year. If this expected level of production and sales occurs and plant expansion
is not needed, how should this increase affect next year’s total amounts for the following costs.
Variable Costs Fixed Costs Mixed Costs
no change no
Given the following costs and activities for Downing Company electrical costs, use the high-low method to
calculate Downings’s variable electrical costs per machine hour.