Question

Mason Company produces short videos used in self-help seminars. Mason Company charges $310 for each video it produces. The number of videos pr oduced over the last six months along with the total costs of producing thes e videos is given below: Videos Produced Month June July August September October November Costs Incurred $18, 380 17,230 14,100 16, 120 15,000 18,900 Mason Company expects to produce 64 videos during December. Using the high-Low method, calculate Mason Company's total expe cted cost for December

Answer 1

Variable cost = (Cost at highest activity - Cost at lowest activity)/(Highest activity-Lowest activity)

= (18,900-14,100)/(75-45) = 160

Fixed cost = 18,900 - (160*75) = 6,900

Expected cost for December = (64*160) + 6900

= 17,140