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:

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, resulting in a stable market condition.

Pollution

The release of harmful substances or products into the environment as a result of human activity.

Marketplace

A physical or digital location where goods and services are exchanged between buyers and sellers.

Externality

A cost or benefit that affects a party who did not choose to incur that cost or benefit.