Let, the production volume = X
Then,
75000 + 4.5*X = 170000 + 2*X
X = (170000-75000)/(4.5-2)
X = 38000 units
So, production volume of more than 38000 units (or 38000 units) per month, will make it less costly to run the high volume, low variety set up.
10. You manage a Low Volume : High Variety plant. Fixed cost per month is $75,000...
Using the high-low method, what is the fixed cost per month? Tool Content January February March April May June July August Number of Copies 40,000 35,000 60,000 80,000 85,000 75,000 82,000 105,000 Total Copy Cost $3,500 $3,200 $ 4,100 $ 5,100 $ 5,600 $ 4,800 $5,300 $ 6,000
Using High-Low to Calculate Fixed Cost, Calculate the Variable Rate, and Construct a Cost Function Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected: Month Labor Cost($) Employee Hours January 9,590 430 February 7,100 500 March 7,631 530 April 8,240 400 May 9,887 460 June 8,590 360 July 11,864 590 August 7,600 330 Pizza Vesuvio's controller wants to calculate the fixed and variable costs associated with labor used in the restaurant. In your calculations, round the...
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