Problem 18-2A Scatter diagram and cost behavior estimation LO P1

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Alden Co.s monthly unit sales and total cost data for its operating activities of the past year follow. Management wants to use these data to predict future fixed and variable costs.

Month	Units Sold					Total Cost				Month		Units Sold					Total Cost
1			322,000			$	159,500			7				358,000				$	263,504
2			167,000				103,250			8				272,000					153,750
3			267,000				207,600			9				75,600					63,000
4			207,000				102,000			10				152,000					132,625
5			292,000				203,500			11				96,000					96,000
6			192,000				114,000			12				102,000					79,650

Problem 18-2A Part 2

2. Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method. (Do not round intermediate calculations.)

High-Low method - Calculation of Variable Cost per Sales Dollar
Change in cost	Cost at high point minus cost at low point					0
Change in volume	Volume at high point minus volume at low point
High-Low method - Calculation of Fixed Costs
Total cost at the high point
Variable costs at the high point:
Volume at the high point:
Variable cost per sales dollar
Total variable costs at the high point
Total fixed costs
Total cost at the low point
Variable costs at the low point:
Volume at the low point:
Variable cost per sales dollar
Total variable costs at the low point
Total fixed costs