Beard Enterprises Has Collected the Following Data in Order to Analyze

question 153

Essay

Beard Enterprises has collected the following data in order to analyze the behavior of their costs:
$\begin{array}{|c|c|c|}\hline \text { Month } & \text { Units Produced } & \text { Total Cost } \\\hline \text { January } & 17,500 & \$ 20,500 \\\hline \text { February } & 27,500 & \$ 21,500 \\\hline \text { March } & 25,000 & \$ 25,000 \\\hline \text { April } & 35,000 & \$ 21,500 \\\hline \text { May } & 47,500 & \$ 25,500 \\\hline \text { June } & 22,500 & \$ 18,500 \\\hline\end{array}$ a.Using the high-low method, calculate the variable cost per unit and the estimated fixed costs.
b.Using the resulting relationship, predict the costs if they produce 28,000 units in a future period.

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Definitions:

Futures Contracts

Agreements to buy or sell a particular commodity or financial instrument at a predetermined price at a specific time in the future.

Profit (Loss)

The financial result of a company's operations and activities, determined by subtracting total expenses from total revenues over a given period.

Ounce

An ounce is a unit of weight commonly used in the United States and Britain, equivalent to 1/16 of a pound or about 28.35 grams.

Pounds

A unit of weight commonly used in the United States, equivalent to 0.453592 kilograms, or a British currency (GBP).