1.
Hagler's Toupees has the following machine hours and production costs for the last six months
of last year:
If Hagler expects to incur 15,800 machine hours in January, what will be the estimated total
production cost using the high-low method?
$13,820.00
$15,557.73
$13,130.00
$13,160.00
Hagler's Toupees has the following machine hours and production costs for the last six months
of last year:
Solution
13167.5 is near to 13160 hence Answer will be $13160
At highest acivity
x2 17300
y2 14240 2860
4000
At lowest acivity 0.715
x1 13300
y1 11380
Production Cost per hour
(14240-11380)/(17300-13300) 0.715
Total Fixed Cost
14240-(0.715*17300) 1870.5

2.
11380-(0.715*13300) 1870.5
Cost Volume Formula
y=1870.5+(0.715x)
x 15800
y=1870.5+(0.715*15800) 13167.5