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12 September, 23:09

Supply costs at Lattea Corporation's chain of gyms are listed below: Client-Visits Supply Cost March 11,665 $28,579 April 11,461 $28,413 May 11,993 $28,837 June 13,800 $28,928 July 11,725 $28,640 August 11,211 $28,239 September 12,005 $28,838 October 11,696 $28,596 November 11,844 $28,721 Management believes that supply cost is a mixed cost that depends on client-visits. Use the high-low method to estimate the variable and fixed components of this cost,

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  1. 13 September, 01:54
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    March 11,665 $28,579

    April 11,461 $28,413

    May 11,993 $28,837

    June 13,800 $28,928

    July 11,725 $28,640

    August 11,211 $28,239

    September 12,005 $28,838 October 11,696 $28,596

    November 11,844 $28,721

    Variable Cost = Highest Activity Cost - Lowest Activity Cost/

    Highest Activity Units - Lowest Activity Units

    28,928 - 28, 239 = 689

    13,800. - 11, 211 = 2,589

    = 689/2,589

    = 0.266

    Fixed Cost = Highest Activity Cost - (Variable Cost Per Units x Highest Activity Units)

    28,928 - (0.266 x 13,800)

    = 28,928 - 3,670.80

    = 25,257.20
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