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X Company uses the high-low method to predict monthly overhead costs. The following were January and March cost and activityX Company uses the high-low method to predict monthly overhead costs. The following were January and March cost and activity

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Answer #1

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

= (12459-6042)/(4600-1150)

= 1.86

Fixed cost = Total cost - total Variable cost

= 12459 - (4600*1.86)

= 3903

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