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Unformatted text preview: oys are produced at a total variable
cost of $126,000, what is the total variable
cost of 4,000 toys?
D. None of the above Learning Objective 4 Analyze a mixed or
semivariable cost using
the high-low method The HighLow Method – An Example
The variable cost per
hour of maintenance
is equal to the
change in cost
divided by the
change in hours
400 The HighLow Method – An Example Total Fixed Cost = Total Cost – Total Variable Cost
Total Fixed Cost = $9,800 – ($6/hour × 850 hours)
Total Fixed Cost = $9,800 – $5,100
Total Fixed Cost = $4,700 The HighLow Method – An Example The Cost Equation for Maintenance Y = $4,700 + $6.00X Example – Mixed Cost
Sales salaries and commissions are $10,000
when 80,000 units are sold, and $14,000 when
120,000 units are sold. Using the high-low method,
what is the variable portion of sales salaries and
Units Cost High level 120,000 $ 14,000 Low level 80,000 10,000 Change 40,000 $ 4,000 $4,000 ÷...
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- Fall '13