McNeil Uses the High-Low Method of Estimating Costs

question 99

Multiple Choice

McNeil uses the high-low method of estimating costs.McNeil had total costs of $50,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 12,000 units,total costs were $78,000.What would McNeil estimate its total cost to be if sales equaled 8,000 units?

• A)$32,000
• B)$52,000
• C)$62,000
• D)$80,000

Grasp the concept of responsibility accounting and the role of department managers in controlling costs.

Explain the impact of underapplied overhead on cost of goods sold.

Comprehend the flow of costs in manufacturing accounts and the calculation of the cost of goods manufactured and sold.

Recognize the principles of inventory valuation and the implications of different valuation methods.

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Definitions:

Hierarchy

A system or organization in which people or groups are ranked one above the other according to status or authority.

Multinational Corporations

Companies that operate in multiple countries beyond their home country, managing production or delivering services in various nations.