Question

Problem 12.20 LO 12-6 High-low method-missing amounts The following data have been extracted from the records of Puzzle Inc.: Production level, in units Variable costs Fixed costs Mixed costs Total costs Required: a. Calculate the missing costs. b. Calculate the cost formula for mixed cost using the high-low method. c. Calculate the total cost that would be incurred for the production of 16,000 units. d. Identify the two key cost behavior assumptions made in the calculation of your answer to (c). February August 10,000 20,000 $24,000 $ ? ? 36,000 20,000 ? $80,000 $118,000

          Problem 12.20
LO 12-6
High-low method-missing amounts The following data have been extracted from the records of Puzzle Inc.:
Production level, in units
Variable costs
Fixed costs
Mixed costs
Total costs
Required:
a.
Calculate the missing costs.
b.
Calculate the cost formula for mixed cost using the high-low method.
c.
Calculate the total cost that would be incurred for the production of 16,000 units.
d.
Identify the two key cost behavior assumptions made in the calculation of your answer to (c).
February
August
10,000
20,000
$24,000
$
?
?
36,000
20,000
?
$80,000
$118,000

Problem 12.20
LO 12-6
High-low method-missing amounts The following data have been extracted from the records of Puzzle Inc.:
Production level, in units
Variable costs
Fixed costs
Mixed costs
Total costs
Required:
a.
Calculate the missing costs.
b.
Calculate the cost formula for mixed cost using the high-low method.
c.
Calculate the total cost that would be incurred for the production of 16,000 units.
d.
Identify the two key cost behavior assumptions made in the calculation of your answer to (c).
February
August
10,000
20,000
24,000
?
?
36,000
20,000
?
80,000118,000

Added by Claudia H.

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