ADM2341 Chapter 6 Cost Behaviour

And the total cost y total maintenance cost 11000 20

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Unformatted text preview: ent days = 800 LO 2 6-34 The Scattergraph Method Make a quick estimate of variable cost per unit and Make a quick estimate of variable cost per unit and Make determine the cost equation. determine the cost equation. Total maintenance at 800 patients Less: Fixed cost Estimated total variable cost for 800 patients Variable cost per unit = $1,000 800 $ 11,000 10,000 $ 1,000 = $1.25/patient-day Y = $10,000 + $1.25X Total maintenance cost Total Number of patient days LO 2 6-35 The High-Low Method Assume the following hours of maintenance work and the total maintenance costs for six months. LO 2 6-36 The High-Low Method The variable cost The per hour of per maintenance is equal to the change in cost divided by the change in hours. the $2,400 = $8.00/hour $8.00/hour 300 LO 2 6-37 The High-Low Method Total Fixed Cost = Total Cost – Total Variable Cost Total Fixed Cost = $9,800 – ($8/hour × 800 hours) Total Fixed Cost = $9,800 – $6,400 Total Fixed Cost = $3,400 LO 2 6-38 The High-Low Method The Cost Equation for Maintenance Y = $3,400 + $8.00X LO 2 6-39 Quick Check Sales salaries and commissions are $10,000 Sales salaries and commissions are $10,000 when 80,000 units are sold, and $14,000 when when 80,000 unit...
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This note was uploaded on 01/27/2014 for the course ADM 2341 taught by Professor Managerialaccounting during the Winter '07 term at University of Ottawa.

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