ACC 406 Lecture 3: Chapter Three
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26 Oct 2015
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The following data have been extracted from the records of Puzzle, Inc.:
February | August | ||||||
Production level, in units | 11,800 | 25,960 | |||||
Variable costs | $ | 33,040 | $ | ? | |||
Fixed costs | ? | 32,500 | |||||
Mixed costs | 29,120 | ? | |||||
Total costs | $ | 94,660 | $ | 161,212 | |||
Required:
a. Calculate the missing costs. (Do not round intermediate calculations.)
b. Calculate the cost formula for mixed cost using the high-low method. (Do not round intermediate calculations. Round "Variable cost" to 2 decimal places.)
cost formula _____ + _____ per unit
c. Calculate the total cost that would be incurred for the production of 16,949 units. (Do not round intermediate calculations.)
Total cost ____
d. Identify the two key cost behavior assumptions made in the calculation of your answer to part c.
cost behavior pattern is ____ relevant range ____