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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 Preview

    ** 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 ...

    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.

    $2.19

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