Asked by Malaisha Easter on May 09, 2024
Verified
Global Publishers has collected the following data for recent months: 
a. Using the high-low method, find variable cost per unit, total fixed costs, and the total cost equation.
b. What is the estimated cost for a month in which 19,000 issues are published?
High-Low Method
A technique used in cost accounting to estimate fixed and variable costs based on the highest and lowest levels of activity.
Variable Cost
Outlays that move in tandem with the level of production or the scale of sales.
Fixed Costs
Expenses that do not change in proportion to the activities of a business, such as rent and salaries, within a certain period or level of production.
- Assess and interpret the fixed and variable expenditures related to the manufacturing and sales environments.
- Utilize the high-low technique to determine variable and fixed expenses.
Verified Answer
Total fixed costs: $18,495 - (17,750 × $0.98) = $1,100
b. Estimated total cost: $1,100 + ($0.98 × 19,000 issues published) = $19,720
Learning Objectives
- Assess and interpret the fixed and variable expenditures related to the manufacturing and sales environments.
- Utilize the high-low technique to determine variable and fixed expenses.
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