High-Low Method to Determine Fixed Cost and Variable Rate McGarvey Manufacturing Company had the following 12 months of data on purchasing cost and number of purchase orders. Month January February March April May June July August September October November December Required: Purchasing Cost $19,250 18,040 18,200 18,050 19,345 19,500 19,670 21,280 19,430 20,020 18,800 19,340 Number of Purchase Orders 370 330 340 410 400 450 460 600 440 560 470 480

High-Low Method to Determine Fixed Cost and Variable Rate McGarvey Manufacturing Company had the following 12 months of data on purchasing cost and number of purchase orders. 2. Calculate the variable rate for purchasing cost based on the number of purchase orders. (Round to the nearest cent.) 3 per purchase order 3. Calculate the fixed monthly cost of purchasing. 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 +($ x 5. If McGarvey Manufacturing Company estimates that next month will have 420 purchase orders, what is the total estimated purchasing cost for that month? 6. What if McGarvey Manufacturing wants to estimate purchasing cost for the coming vear and expects 5,330 purchase orders? What will estimated total purchasing cost be? What is the total fixed purchasing cost? Why doesn't it equal the fixed cost calculated in Requirement 3 above? High-Low Method to Determine Fixed Cost and Variable Rate McGarvey Manufacturing Company had the following 12 months of data on purchasing cost and number of purchase orders. 2. Calculate the variable rate for purchasing cost based on the number of purchase orders. (Round to the nearest cent.) 3 per purchase order 3. Calculate the fixed monthly cost of purchasing. 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 +($ x 5. If McGarvey Manufacturing Company estimates that next month will have 420 purchase orders, what is the total estimated purchasing cost for that month? 6. What if McGarvey Manufacturing wants to estimate purchasing cost for the coming vear and expects 5,330 purchase orders? What will estimated total purchasing cost be? What is the total fixed purchasing cost? Why doesn't it equal the fixed cost calculated in Requirement 3 above