Christie Sports is retailer that sells ski and board gear, hiking and camping equipment, clothes and other accessories, which uses the high-low method for cost estimation . Management has provided the following cost data for two levels of monthly sales volume. The average price per item is $200.

Sales Volume (items)                                    6,000              7,500

Cost of sales (CoS)                                  $347,400        $405,000

Selling and administrative (S&A)            $436,800        $458,400

Required:

1) Determine the unit variable cost of sales.

2) Determine the unit variable S&A expense.

3) Determine the total cost function (including both CoS and S&A).

4)  Determine the total estimated cost (including both CoS and S&A) for a sales volume of 6,200 items. 

Answer rating: 100% (QA)

To determine the unit variable cost of sales we can use the highlow method and calculate the change ... View the full answer