Charger Corporation Has Three Costs: A, Which Is Variable; B

question 36

Essay

Charger Corporation has three costs: A, which is variable; B, which is fixed; and C, which is semi-variable. The company uses the high-low method and extracted the following data from its accounting records:
▪ At 180,000 hours of activity, Cost A totaled $2,610,000.
▪ At 140,000 hours, the low point during the period, Cost C totaled $1,498,000; at 200,000 hours, the high point, Cost C's fixed portion amounted to $1.75 per hour.
▪ At 160,000 hours of activity, the sum of Costs A, B, and C amounted to $8,162,000.
Required:
A. Compute the variable portion (total) of Cost C at 140,000 hours of activity.
B. Compute Cost C (total) at 160,000 hours of activity.
C. Compute Cost B (total) at 160,000 hours of activity.

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Definitions:

Unilateral Changes

Actions taken by an employer to alter conditions of employment (such as wages, hours, or terms and conditions) without consultation or agreement with the union representing the employees.

Permissive Bargaining Issue

issues in collective bargaining that are not mandatory or illegal for negotiation, and may be discussed at the discretion of both parties, such as certain employee benefits.

Good Faith Effort

An honest, sincere intention or attempt to fulfill a duty or obligation without intent to defraud or seek an unfair advantage.

Legal Requirements

Mandatory conditions or laws that an entity must comply with in its operations or activities.