Bronze Products Has Presented the Following Information for the Past

question 79

Essay

Bronze Products has presented the following information for the past eight months operations:
a.Using the high-low method,calculate the fixed cost per month and variable cost per unit.
b.What would total costs be for a month with 5,000 units produced?

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Definitions:

Fixed Expenses

Costs that do not change in total despite fluctuations in business activity levels or volume, such as rent or salaries.

Percentage of Sales Approach

A method for forecasting financial needs based on a fixed percentage of projected sales, often used in budgeting and financial planning.

Profit Margin Percentage

A profitability ratio calculated by dividing net income by revenue, expressing the result as a percentage.

Plowback Ratio

The proportion of earnings retained by a business, rather than distributed to its shareholders as dividends, to reinvest in the core business or to pay debt.