The managerial accountant at Fast and Mean Manufacturingreported that the organization contains an automated productionline to manufacture and produce its products for consumers to enjoyin the marketplace. The managerial accountant reported that thecompany uses the high-low method to estimate the costs in the newbudget. The managerial accountant reported the followinginformation:
Month | Total Machine-Hours | Total Costs |
January | 250,000 | $5,500,000 |
February | 248,000 | $5,260,000 |
March | 249,000 | $5,400,000 |
April | 248,000 | $5,220,000 |
May | 238,000 | $5,180,000 |
June | 230,000 | $5,130,000 |
Compute the slope of the mixed cost, or the variable cost perunit of activity.
Compute the vertical intercept, or the fixed cost component ofthe mixed cost.
What is the mixed cost equation?
