Question

^{Sunland Flower Cart incurred the following monthly costs. Balloons (10 per bouquet) Insurance Delivery Employee compensation Advertising 3,000 $ 6,900 $ 6,000 $ 15,000 $ 17,000 $ 1,500 Bouquets Sold 5,000 $ 11,500 $ 6,000 $ 25,000 $ 23,000 $ 1,500 7,000 $ 16,100 $ 6,000 $ 35,000 $ 29,000 $ 1,500 Using the form y = mx +b, estimate the cost formula for each cost incurred by Sunland Flower Cart. (Round unit cost to 2 decimal places, e.g. 52.75. If the cost equation has no variable component enter O for the amount.) Balloons y = $ х + $ Insurance y = $ х + $ Delivery y = $ х + $ Employee compensation X y = $ + $ Advertising y = $ X + $}

Answer 1

Balloons	y=	$2.30	x	+	0
Insurance	y=	$0.00	x	+	6000
Delivery	y=	$5.00	x	+	0
Employee Compensation	y=	$3.00	x	+	8000
Advertising	y=	$0.00	x	+	1500
Using high low method, variable component = Cost at higher level - Cost at lower level/(Difference in units)
Employee Compensation = (29000-17000)/(7000-3000)
=$3 per unit
Fixed cost = 17000-3000*3 = $8000