Question

The following data relating to units shipped and total shipping expense have been assembled by Archer Company, a manufacturer of large, custom-built air-conditioning units for commercial buildings: Units Shipped Month January February March April May June Total Shipping Expense $ 5,020 3,480 4,240 3,430 1.940 8.110 1,660 July Required: 1. Estimate a cost formula for shipping expense using the high-low method. Y= + x 2. Not available in Connect 3. What factors, other than the number of units shipped, are likely to affect the company's total shipping expense? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) 2 Weight of the units shipped Distance travelled Number of workers used to manufacture the goods shipped Size of the units shipped Fixed costs to produce the units

Answer 1

O Variable cost Highest Actory cost - lowest Activity cost Highest Actioity units - lowest Actory unit $8,110-$11660 17-2 = - $6450 2 15 $ 430 PO fixed cost = notas cosr- variable cor = $1,660 - 2x¢ 430 $1,660 - $860 $800 Cost formula » Y = 4800+ $430x No of units. (2) factors that affect company, totas shipping expens Factors that → weight of the units shipped → Distance travelled