Question: Using the high-low method, determine the expected profit or loss on the special order ( use a negative sign for a loss) louise Automotive is

Using the high-low method, determine the expected profit or loss on the special order ( use a negative sign for a loss)

Using the high-low method, determine the expected
louise Automotive is currently operating at 80% capacity. The company recently received an offer from a Japanese truck manufacturer to purchase 35,000 units of a power steering system component for $200 per unit. The Vice President of Sales, John Lee, mentions that there will be an additional $4.00 shipping cost for each component but believes that accepting the order will help expand into the international market. To determine variable and fixed costs, Louise's accountant used the High-Low Method with the following production and cost data for the past two years: Production Level 200,000 units | $55,000,000 Additionally, the VP of Engineering, Sarah Kim, states that the $200 per unit price is below the normal $280 selling price and below the unit cost of the component. She also notes that additional setup costs of $230,000 and an equipment lease cost of $260,000 will be required. Using the High-Low Method, determine the expected profit or loss on the special order (use a negative sign for a loss)

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