High-Low Method

The Smith Company has accumulated the following data concerning a mixed cost. The company is using the units produced as the activity level.

August
10,000 Units Produced

$14,940 Total Cost

September
8,600 Units Produced

$13,450 Total Cost

October
7,100 Units Produced

$11,200 Total Cost

November
7,700 Units Produced

$12,200 Total Cost

December
8,200 Units Produced

$12,660 Total Cost

Using the high-low method, compute the variable and fixed cost elements.
If the company produces 8,000 units, estimate the total cost.

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