Supply costs at Lattea Corporation's chain of gyms are listed below: Client-Visits Supply Cost March 11,665 $28,579 April 11,461 $28,413 May 11,993 $28,837 June 13,800 $28,928 July 11,725 $28,640 August 11,211 $28,239 September 12,005 $28,838 October 11,696 $28,596 November 11,844 $28,721 Management believes that supply cost is a mixed cost that depends on client-visits. Use the high-low method to estimate the variable and fixed components of this cost,

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Business

Arely Figueroa

24 November, 07:13

Supply costs at Lattea Corporation's chain of gyms are listed below: Client-Visits Supply Cost March 11,665 $28,579 April 11,461 $28,413 May 11,993 $28,837 June 13,800 $28,928 July 11,725 $28,640 August 11,211 $28,239 September 12,005 $28,838 October 11,696 $28,596 November 11,844 $28,721 Management believes that supply cost is a mixed cost that depends on client-visits. Use the high-low method to estimate the variable and fixed components of this cost,

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Samir Baldwin · Answer 1

March 11,665 $28,579

April 11,461 $28,413

May 11,993 $28,837

June 13,800 $28,928

July 11,725 $28,640

August 11,211 $28,239

September 12,005 $28,838 October 11,696 $28,596

November 11,844 $28,721

Variable Cost = Highest Activity Cost - Lowest Activity Cost/

Highest Activity Units - Lowest Activity Units

28,928 - 28, 239 = 689

13,800. - 11, 211 = 2,589

= 689/2,589

= 0.266

Fixed Cost = Highest Activity Cost - (Variable Cost Per Units x Highest Activity Units)

28,928 - (0.266 x 13,800)

= 28,928 - 3,670.80

= 25,257.20