Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. question 5: cost structure estimation month activi

Question 5: Cost structure estimation month activity volume in units total costs Oct 80 $6,920...

90.2K

Verified Solution

Question

Accounting

image

Question 5: Cost structure estimation month activity volume in units total costs Oct 80 $6,920 Nov 65 $7,100 Dec 110 $8,900 a) Which cost structure estimation method should we use? o high-low method o account classification method b) To identify the low and high points, we should look for lowest/highest costs lowest/highest activity c) Estimate the cost structure parameters: total FC= unit VC= Write down the total cost equation TC = + * volume d) Predict the total costs of producing 110 units: TC = e) Can we use the estimates from (C) to predict costs at volume of 5,000 units? YES: Just plug in volume=5,000 in the total cost equation. NO: 5,000 units is outside the relevant range (the normal range of activity is around 65-110 units)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students