Ask Question
19 June, 15:57

Collins Company had the following cost data available. The Collins accountant believes that direct labor hours is the correct cost driver to use to predict and manage these costs. $50,000; 15,000 direct labor hours for January $40,000; 12,000 direct labor hours for February $35,000; 10,000 direct labor hours for March $38,000; 11,000 direct labor hours for April $45,000; 12,500 direct labor hours for May $45,000; 14,000 direct labor hours for June Use the high-low method to compute the total amount of monthly fixed costs for Collins Company.

+3
Answers (1)
  1. 19 June, 16:24
    0
    The total amount of monthly fixed costs for Collins Company is 5,000 dollars.

    Explanation:

    This problem requires us to calculate the fixed cost using high low method. The detail calculation is given below.

    Variable cost = ($ 50,000 - $ 35,000) / (15,000 - 10,000) = 3 per unit

    Fixed Cost = 50,000 - (3*15000) = 5,000 dollars or

    Fixed cost = 35,000 - (3 * 10,000) = 5,000 dollars
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Collins Company had the following cost data available. The Collins accountant believes that direct labor hours is the correct cost driver ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers