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: |
Month | Units Shipped |
Total Shipping Expense |
January | 10 | $ 5,650 |
February | 7 | 4,080 |
March | 7 | 3,980 |
April | 5 | 3,150 |
May | 4 | 2,510 |
June | 18 | 8,820 |
July | 3 | 2,220 |
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.) |
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Cost formula for shipping expense using the high-low method:-
It is computed using a few steps.
First we have to calculate fixed and variable costs.
Calculate variable cost per unit using identified high and low activity levels:
Variable cost
= (Total cost of high activity- total cost of low activity) / (Highest activity unit- Lowest activity unit)
=(8820-2220) / (18-3)
=6600/15
=440/ unit
Calculater fixed costs
To calculate the total fixed costs, use either the high or low cost and the variable cost into the total cost formula:
Here, we using the highest cost of june month
Total cost= (Variable cost*units produced)+ Total fixed cost
8820=(440*18)+Total fixed cost
Ie, Total fixed cost= 900
Using all these informations,
Total cost= Total fixed cost+ (Variable cost* units produced)
Total cost= 900+(440 * units produced)
Hence, cost formula for shipping expense using the high-low method:-
Total cost= 900+(440 * units produced)
Ie, y= 900 + 440 x
Where y = total cost
x = units produced
(2)
What factors, other than the number of units shipped, are likely to affect the company’s total shipping expense?
Answer:
Weight of the units shipped: The shipping expense might increase if the weight of the shipment is very huge or very low.
Distance travelled
Generally shipping cost vary with the distance travelled
The following data relating to units shipped and total shipping expense have been assembled by Archer...
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...
The tolowing data relating to units shipped and total shipping expense have been assembled by Archer Company, a wholesaler of large, custom-built air-conditloning units for commercial buildings Total Units Month Shipped January Februay March Apri May June July 1,900 $2.400 1,800 $2,100 $2.400 $3,400 $1,300 Required: 1a. Prepare a scatter graph using the data given above. (Plot cost on the vertical axis and activity on the horizontal axis.) Instructions: 1. On the graph below, use the point tool jan) to...
4. What factors, other than the number of units shipped, are likely to affect the company’s 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.) Required information Exercise 6A-4 High-Low Method; Scattergraph Analysis...
Required information Exercise 6A-4 High-Low Method; Scattergraph Analysis [LO6-10] The following information applies to the questions displayed below] Archer Company is a wholesaler of custom-built air-conditioning units for commercial buildings. It gathered the following monthly data relating to units shipped and total shipping expense: ShippedExpense s 2,400 s 2,900 s 2,300 s 2,600 $ 2,900 $ 3,900 s 1,800 Month anuary Shipped otal Shippin February March April May une uly Exercise 6A-4 Part 4 4. What factors, other than the...
please let me know what boxes shoulf be checked! ix Chapter 6 Graded Homework i Sowed Help Save & Exit [The following information applies to the questions displayed below) Archer Company is a wholesaler of custom-built air-conditioning units for commercial buildings. It gathered the following monthly data relating to units shipped and total shipping expense: Units Shipped Month January February March April May June July Total Shipping Expense $ 1.800 $ 2.300 $ 1,700 $ 2,000 $ 2, 3ee $...
Archer Company is a wholesaler of custom-built air-conditioning units for commercial buildings. It gathered the following monthly data relating to units shipped and total shipping expense: Month Units Shipped Total Shipping Expense January 2 $ 2,200 February 5 $ 2,700 March 3 $ 2,100 April 4 $ 2,400 May 6 $ 2,700 June 7 $ 3,700 July 1 $ 1,600 Using the high-low method, estimate the cost formula for shipping expense. Variable shipping expense: (per unit) Fixed shipping expense: (per...
what is variable expense?? fixed shipping expense is correct *note* variable expense is not $25 or $250 pter 6 Graded Homework i Required information [The following information applies to the questions displayed below.] commercial Archer Company is a wholesaler of custom-built air-conditioning units for monthly data relating to units shipped and total shipping expense: buildings. It gathered the following Units Shipped Month January February March April May June July Total Shipping Expense $ 1,800 $ 2.300 $1,700 $ 2, eee...
what is the variable shipping expense? its not 250 or 2.50 Required information The following information applies to the questions displayed below.] art 1 of 2 Archer Company is a wholesaler of custom-built air-conditioning units for commercial buildings. It gathered the following monthly data relating to units shipped and total shipping expense: Units Shipped eBook Month January February March April Total Shipping Expense $ 1.800 $ 2,300 $1,700 $ 2,000 $ 2,300 $ 2,700 $ 1,200 Print References June July...
Required information The following information applies to the questions displayed below.] Archer Company is a wholesaler of custom-built air-conditioning units for commercial buildings. It gathered the following monthly data relating to units shipped and total shipping expense: Units Shipped Month January February March Total Shipping Expense $ 1,800 $ 2,300 $1,700 $ 2,000 $ 2,300 $ 2,700 $1,200 April May June July 4. What factors, other than the number of units shipped, are likely to affect the company's shipping expense?...
Required Information [The following information applies to the questions displayed below) Archer Company is a wholesaler of custom-built alr-conditioning units for commercial buildings. It gathered the following monthly data relating to units shipped and total shipping expense: Units Shipped Month January February March April May Total Shipping Expense $ 2,400 $ 2,900 $ 2,300 $ 2.600 $ 2,900 $ 3.900 $ 1,800 June als Required: 1-a. Prepare a scattergraph using the data given above. Plot cost on the vertical axis...