Andrea just employed a new manager for her web business. The manager is new and would like
Question:
Andrea just employed a new manager for her web business. The manager is new and would like to determine the variable and fixed costs associated with work completed between January to June. Calculate the cost for the past six months: Show all calculations
Month | Number of website hits | Customer website costs |
January | 28,800 | $21,500 |
February | 31,200 | $22,500 |
March | 25,200 | $19,500 |
April | 26,400 | $20,000 |
May | 30,800 | $23,000 |
June | 29,000 | $21,900 |
Required:
1. Using the high-low method, estimate the variable cost per website hit and the monthly fixed costs associated with the customer website. 3 marks
2. Using the high-low method, determine the monthly fixed costs associated with the customer website. - 4 marks
3. If Andrea expects 28,000 website hits for July, what are their anticipated customer website costs for July? - 4 marks
Cornerstones of Managerial Accounting
ISBN: 978-0176530884
2nd Canadian edition
Authors: Maryanne M. Mowen, Don Hanson, Dan L. Heitger, David McConomy, Jeffrey Pittman