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Assignment 2,3
Assignment 2,3
Assignment 2,3
Assignment no: 2
Date: 5th of March 2019
Cost Behavior
1. The cost of small glass plates used for lab tests in a hospital X
(number of lab tests performed).
Assignment no: 3
Date: 5th of March 2019
Required:
1. Using the high-low method, estimate a cost formula for shipping expense.
2. In the first quarter of Year 3, the company plans to sell 21,000 units at a selling price of $5o per
unit. Prepare a contribution format income statement for the quarter.
Answer:
Y= ax+b
b= (high cost of activity – low cost of activity)\ (high activity level – low activity level)
= (y2-y1)\(x2-x1)
B= (232,000 – 160,000)\ (25000-16000) = 8 per unit.
Fixed cost = total cost – total variable cost
Fixed cost = 232,000 – (8*25000)
Fixed cost = 32,000
Y=32000+8X
Variable expenses:
Fixed expenses: