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    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:


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    Solution Preview

    We first find the equation for manufacturing overhead using the ...

    Solution Summary

    The solution explains the use of high low method to calculate the fixed manufacturing cost.