Question

I'm unsure with my answer.

Question 4 Executive Training, Inc. provides a personal development seminar that is popular with many companies. Executive Training charges $500 for each seminar it conducts. The number of seminars offered over the last six months along with the total costs of offering these seminars appear below: Seminars Offered Month January February March April May June Costs Incurred $15,400 14,200 18,000 14,700 19,600 16,500 Executive Training, Inc. expects to offer 72 seminars during July. Using the high-low method, calculate Executive Training's expected net income for July. 16,940

Answer 1

Variable cost per unit=[Total cost at highest level-Total cost at lowest level]/(Highest level-Lowest level)

=(19600-14200)/(75-45)

=$180 per seminar

Total fixed cost=19600-(180*75)=$6100

Hence total cost for July=Variable cost+Fixed costs

=(180*72)+6100=$19060

Total revenue for July=(500*72)=$36000

Hence net income=Revenue-Expenses

=(36000-19060)=$16940

NOTE:

NOTE:Total fixed costs and variable cost per unit do not change with change in units