Asked by Shelby Wilcox on May 06, 2024
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Dollywood Corporation accumulates the following data concerning a mixed cost using miles as the activity level.
Milles Driven Total Cost Milles Driven Total Cos January 10,000$16,500 March 9,000$12,500 February 8,000$14,500 April 7,000$12,000\begin{array}{lccccc}&\text { Milles Driven }&\text {Total Cost }&&\text {Milles Driven }&\text {Total Cos }\\\text { January } & 10,000 & \$ 16,500 & \text { March } & 9,000 & \$ 12,500 \\\text { February } & 8,000 & \$ 14,500 & \text { April } & 7,000 & \$ 12,000\end{array} January February Milles Driven 10,0008,000Total Cost $16,500$14,500 March April Milles Driven 9,0007,000Total Cos $12,500$12,000 Instructions
Compute the variable and fixed cost elements using the high-low method.
High-Low Method
A technique used in cost accounting to estimate fixed and variable costs based on the highest and lowest levels of activity.
Mixed Cost
Mixed cost refers to a cost that contains both variable and fixed cost elements, meaning it changes with the level of activity but not directly proportionate.
Activity Level
The volume of work or output produced, often used in costing and budgeting processes to measure levels of operations.
- Apply the high-low method to analyze variable and fixed cost elements from given data.
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Learning Objectives
- Apply the high-low method to analyze variable and fixed cost elements from given data.
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