Name thie cost breakdown oft of sicam used in its factory in

Name thie cost breakdown oft of sicam used in its factory into fixed and variable components. The following data on the cost 25) 3 points Sharp, Inc, is preparing a budget for next year and requires a of stcam used and the units produced are available for the last six months: Cost of Steam Units Produced S15,850 uly13,000 3,000 2.000 August. eptember16,370 October . 20,000 3,750 2,670 November.. December..18.500 17,600 Total..$101.32016970 Sharp uses the high-low method of analysis Required: Show your work in answering the question. Failure to do so results in zero points a. What is the estimated variable cost of steam per unit produced? b. What is the total fixed cost? 19 - c. If there were 2,500 units produced the cost of steam would be?

Solution

Highest level activity = 3750 Lowest level activity = 2000 a Variable cost per unit = (20000-13000)/(3750-2000)= $4 b Total fixed cost=20000-(3750*4)= 5000 c Total cost = 5000+(2500*4)= 15000