Relevant Range and High-Low Method The following selected data relate to the maj

Question

Relevant Range and High-Low Method

The following selected data relate to the major cost categories experienced by Sterling Company at varying levels of operating volumes. Assuming that all operating volumes are within the relevant range, calculate the appropriate costs in each column in which blanks appear:

Total Cost (@ 5,000 Units) Total Cost (@ 6,000 units) Variable Cost per Unit Total Fixed Cost Total Cost (@ 7,000 units) Direct labor (variable) $65,000 $78,000 $Answer $Answer $Answer Factory supervision (semi-variable) 20,000 22,000 $Answer $Answer $Answer Factory depreciation (fixed) 19,000 19,000 $Answer $Answer $Answer

Explanation / Answer

Total Cost (@ 5,000 Units) Total Cost (@ 6,000 units) Variable Cost per Unit Total Fixed Cost Total Cost (@ 7,000 units) Direct labor (variable) 65000 78000 13 0 91000 Factory supervision (semi-variable) 20,000 22,000 2 10000 24000 Factory depreciation (fixed) 19,000 19,000 0 19,000 19,000

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