Ask Question
23 February, 05:58

Collins Company had the following cost data available. The Collins accountant believes that direct labor hours is the correct cost driver to use to predict and manage these costs. $50,000; 15,000 direct labor hours for January $40,000; 12,000 direct labor hours for February $35,000; 10,000 direct labor hours for March $38,000; 11,000 direct labor hours for April $45,000; 12,500 direct labor hours for May $45,000; 14,000 direct labor hours for June Use the high-low method to compute the total amount of monthly fixed costs for Collins Company.

+5
Answers (1)
  1. 23 February, 09:42
    0
    The total amount of monthly fixed costs for Collins Company is 5,000 dollars.

    Explanation:

    This problem requires us to calculate the fixed cost using high low method. The detail calculation is given below.

    Variable cost = ($ 50,000 - $ 35,000) / (15,000 - 10,000) = 3 per unit

    Fixed Cost = 50,000 - (3*15000) = 5,000 dollars or

    Fixed cost = 35,000 - (3 * 10,000) = 5,000 dollars
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Collins Company had the following cost data available. The Collins accountant believes that direct labor hours is the correct cost driver ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers