Byrnes Company accumulates the following data concerning a mixed cost, using units produced as the activity level.
Units Produced
Total Cost
March
9,800
$14,740
April
8,500
13,250
May
7,000
11,100
June
7,600
12,000
July
8,100
12,460
(a)Compute the variable- and fixed-cost elements using the high-low method.
(b)Estimate the total cost if the company produces 6,000 units.
Determine the highest and lowest levels of activity.
Compute variable cost per unit as: Change in total costs ÷ (High – low activity level) = Variable cost per unit.
Compute fixed cost as: Total cost – (Variable cost per unit × Units produced) = Fixed cost.