1. The costs and output of a business for the last quarter of the year were as follows:
Output (units)
Cost $
Oct
1,800
8,850
Nov 2,000
8,750
Dec 800
3,950
Using the high low method which of the following represents the estimated cost in January
of producing 1,500 units if the monthly fixed costs are expected to increase by $100 at the
start of next year?
A. $6,750
B. $6,850
C. $7,380
D. $7,480
2. An organization has the following total costs at three activity levels:
Activity level (units)
Total cost ($)
8,000
204,000
12,000
250,000
15,000
274,000
Variable cost per unit is constant within this activity range and there is a step up of 10%
in the total costs when the activity level exceeds 11,000 units
What is the total cost at activity level of 10,000 units?
Answer: ________________
3. An organization has the following total costs at three activity
Activity level (units)
Total cost
4,000
6,000
7,500
$40,800
$50,000
$54,800
Variable cost per unit is constant within this activity range and there is a step up of 10%
in the total fixed costs when the activity level exceeds 5,500 units
What is the total cost at an activity level of 5,000 units?
A.
B.
C.
D.
$44,000
$44,800
$45,400
$46,800
4. The following information relates to the manufacture of Product LL in 20X8:
Output (units)
Total cost ($)
200
7,000
300
8,000
400
8,600
For output volumes above 350 units the variable per unit fall by 10% (Notes: this fall
applies to all units – not just excess above 350)
Estimates the cost of producing 450 units of Product LL in 20X9
Answer: _________________
5. The total costs incurred in 20X3 at various output levels in a factory have been measured
as follows:
Output (units)
Total costs ($)
26
6,566
30
6,510
33
6,800
44
6,985
48
7,380
50
7,310
When output is 80 units or more, another factory unit must be rented and fixed costs
therefore increase by 100%
Variable cost per unit is forecast to rise by 10% in 20X4
Calculate the estimated total costs of producing 100 units in 20X4
Answer: ___________________
6. The costs of the factory maintenance departments for C Co appear to have a variable
element dependent upon the number of units produced. The fixed element of the costs steps
up when 20,000 or more units are produced. At an activity level of 22,000, the fixed
element of cost is $25,000. The variable cost per unit is constant.
Volume of production
Units
$
18,000
200,000
22,000
245,000
What would be the total cost for 19,000 units and the total cost for 21,000 units?
A.
B.
C.
D.
19,000
21,000
$210,000
$210,000
$215,000
$231,660
$235,000
$230,000
$235,000
$258,940
7. The costs of the factory maintenance department for Freer Co appear to have a variable
element dependent upon the number of units produced. The fixed element of the costs steps
up by $30,000 when 32,000 or more units are produced. The variable cost per unit is
constant.
Volume of production
Units
$
28,000
160,000
34,000
208,000
What would be the total cost for 29,000 units and the total cost for 35,000 units?
A.
B.
C.
D.
29,000
35,000
$163,000
$163,000
$296,000
$296,000
$181,000
$211,000
$344,000
$181,000