Beard Enterprises Has Collected the Following Data in Order to Analyze

question 5

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:

Convertible Securities

Financial instruments, such as bonds or preferred shares, that can be converted into a specified number of common shares of the issuing company.

Diluted Earnings

Represents the earnings per share (EPS) if all convertible securities were converted into common stock.

Dilutive

Referring to a financial action or arrangement, such as the issuance of new shares, that decreases an existing shareholder's percentage of ownership.

Antidilutive

Refers to financial transactions or securities that, if exercised or converted into common stock, would increase earnings per share.