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    Fixed and Variable Costs

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    A. STONES Company accumulates the following data concerning a mixed cost, using miles as the activity level.

    Miles Driven Total Cost Miles Driven Total Cost
    January 8,000 $ 15,850 March 8,500 $ 16,800
    February 7,500 14,900 April 8,200 16,230

    Compute the fixed and variable cost elements using the high-low method.

    Variable cost (include two digits after the decimal) $
    Fixed cost $

    B. For NA's Company, variable costs are 70% of sales, and fixed costs are $180,000. Management's net income goal is $96,000. Compute the required sales needed to achieve management's target net income of $96,000. (Use the mathematical equation approach.)

    Sales= $

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    Solution Preview

    Accounting
    A. STONES Company accumulates the following data concerning a mixed cost, using miles as the activity level.

    Miles Driven Total Cost Miles Driven Total Cost
    January 8,000 $ 15,850 March 8,500 $ 16,800
    February 7,500 ...

    Solution Summary

    This solution is comprised of a detailed explanation and calculation to find the fixed and variable cost elements using the high-low method and the required sales needed to achieve management's target net income of $96,000 using the mathematical equation approach.

    $2.19

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