Question 3 options:

Entry Rules:

Round your answers as required below.

Never enter $ or , when inputting numerical answers

QUESTION:

The manager of TechTack Inc. wants to determine a cost formula for their receiving costs. Cost analysis has determined that these costs are mixed and must be broken into their fixed and variable components. Receiving Orders Processed has been selected as the activity driver for the receiving costs. The following data for the last eight (8) month period have been collected:

Month	Receiving Orders Processed	Receiving Costs
February	53,900	$194,100
March	17,250	$128,300
April	10,780	$129,400
May	59,300	$194,100
June	28,030	$150,900
July	56,060	$183,300
August	10,800	$118,600
September	48,510	$237,200

Using the high-low method, prepare a cost formula for the power costs.

Management has asked you to round the fixed costs to the nearest dollar and round the variable cost to the nearest penny.

Part 1:

What is the variable cost per activity? Be sure to round to the nearest penny (2 decimal places).

Part 2:

What is the fixed costs per month?

Be sure to round to the nearest dollar (whole number).

In addition, be sure to use the rounded answer from Part 1 for the variable costs in order to calculate the fixed costs!

NOTE: you can use the high or the low point in order to calculate the fixed costs.

Part 3:

Using your answers to Part 1 and 2, develop a cost formula.

Using that cost formula, calculate the total predicted costs if the level of activity was 46,850.

Round your answer to the nearest dollar (whole number).

Part 4:

Develop an annual cost formula for receiving costs.

What is the variable cost per activity in your cost formula?

Be sure to round to the nearest penny (2 decimal places)?

What is the fixed costs in the annual cost formula for receiving costs?

Round your answer to the nearest dollar (whole number)