Explore BrainMass

Explore BrainMass

    High-Low method

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Johnson Company has observed that at an activity level of 5,000 units the cost for maintenance is $6,500 and at 10,000 units the cost for maintenance is $9,000. Using the high-low method, the cost formula for maintenance is

    $4,000 plus $.50 per unit
    $3,000 plus $.60 per unit
    $.90 per unit
    $1.30 per unit

    © BrainMass Inc. brainmass.com June 3, 2020, 10:02 pm ad1c9bdddf

    Solution Preview

    We separate the fixed and variable costs
    Variable cost = ...

    Solution Summary

    The solution explains how to determine the cost formula using the high low method