High-Low Method to Determine Fixed Cost and Variable Rate Dohini Manufacturing Company had the following 12 months of data on purchasing cost and number of purchase orders. Number of Purchasing Purchase Month Cost Orders January $18,860 370 February 18,060 320 March 19,250 370 April 18,050 410 May 19,345 400 June 19,500 450 July 19,670 460 21,060 570 August September 440 19,430 500 October 20,020 470 November 18,800 480 December 19,340 Required: 12.5 X February 2. Calculate the variable rate for purchasing cost based on the number of purchase orders, (Round to the nearest cent.) 12.5 X per purchase order 3. Calculate the fixed monthly cost of purchasing 13,940 x 4. Write the cost formula for the purchasing activity showing the fixed cost and the variable rate. Round variable rate to the nearest cent. Total purchasing cost 13,940 x * Purchase orders 5. If Dohini Manufacturing Company estimates that next month will have 440 purchase orders, what is the total estimated purchasing cost for that month? 19,440 x 6. What if Dohini Manufacturing wants to estimate purchasing cost for the coming year and expects 5,350 purchase orders? What will estimated total purchasing cos 234, 155 x What is the total fixed purchasing cost? 167,280 x Why doesn't it equal the fixed cost calculated in Requirement 3 above? because there are 12 months in the year Feedback Check My Work 1. Recall that the high point is the point with the highest output or driver level. 2. Recall that the low point is the point with the lowest output or driver level