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High-low method-missing amounts

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July December
E12.2
Production level, in units........... 5,000 10,000
Variable costs........................... $12,000 $ ?
Fixed costs.............................. ? 18,000
Mixed costs............................ 10,000 ?
Total costs............................. $40,000 $59,000

a.Calculate missing costs.
b.Calculate cost formula for mixed cost using the high-low method.
c.Calculate the total cost that would be incurred for the production of 8,000 units
d.Identify the two key cost of behavior assumptions made in the calculation of your answer to part c.

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Solution Summary

This solution calculates the missing costs, the cost formula for mixed cost using the high-low method, and the total costs based on the given financial information.

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** Please see the attached file for the complete solution formatted in Excel **

Missing amounts
July December
Production level, in units 5,000 10,000

Variable costs $12,000 $24,000
Fixed costs $18,000 $18,000 ...

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