Corris Co. accumulates the following data concerning a mixed cost using miles as the activity level. Miles Driven Total Cost January 10 , 000 $ 17 , 000 February 8 , 000 13 , 500 March 9 , 000 14 , 400 April 7 , 000 12 , 500 \begin{array}{lrr} & ext { Miles Driven } & ext { Total Cost }\ ext { January } & 10,000 & \$ 17,000 \ ext { February } & 8,000 & 13,500 \ ext { March } & 9,000 & 14,400 \ ext { April } & 7,000 & 12,500\end{array} January February March April Miles Driven 10 , 000 8 , 000 9 , 000 7 , 000 Total Cost $17 , 000 13 , 500 14 , 400 12 , 500 InstructionsCompute the variable and fixed cost elements using the high-low method.

Question

Corris Co. accumulates the following data concerning a mixed cost using miles as the activity level.    Miles Driven   Total Cost   January  10 , 000 $ 17 , 000  February  8 , 000 13 , 500  March  9 , 000 14 , 400  April  7 , 000 12 , 500 \begin{array}{lrr} & 	ext { Miles Driven } & 	ext { Total Cost }\ 	ext { January }  &  10,000  &  \$ 17,000 \	ext { February }  &  8,000  &  13,500 \	ext { March }  &  9,000  &  14,400 \	ext { April }  &  7,000  &  12,500\end{array}  January   February   March   April  ​  Miles Driven  10 , 000 8 , 000 9 , 000 7 , 000 ​  Total Cost  $17 , 000 13 , 500 14 , 400 12 , 500 ​   InstructionsCompute the variable and fixed cost elements using the high-low method.

Crhistian Negrete · Accepted Answer

Final Answer :  $ 17 , 000 − $ 12 , 500 10 , 000 − 7 , 000 = $ 1.50 =  variable cost per mile  \frac { \$ 17,000 - \$ 12,500 } { 10,000 - 7,000 } = \$ 1.50 = 	ext { variable cost per mile } 10 , 000 − 7 , 000 $17 , 000 − $12 , 500 ​ = $1.50 =  variable cost per mile    ($1.50 x 10000) + fixed cost = $17000Fixed cost = $2000

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