High Low Method
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Anderson Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product.
Production volume 4,000 units 5,000 units
Direct materials 99.20 per unit 99.20 per unit
Direct labor 45.50 per unit 45.50 per unit
Manufacturing overhead 94.00 per unit 77.60 per unit
The best estimate of the total monthly fixed manufacturing cost is:
376,000
388,000
954,800
328,000
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Solution Summary
The solution explains the use of high low method to calculate the fixed manufacturing cost.
Solution Preview
We first find the equation for manufacturing overhead using the ...
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