The Gangwere Company Has Assembled the Following Data Pertaining to Certain

question 246

Essay

The Gangwere Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Gangwere Company has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation.


Required:
Using the high-low method determine the forecasted cost for July if the number of hours used is expected to be 3,200.

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Definitions:

Authority

The power or right to give orders, make decisions, and enforce obedience.

Support Department Allocation Rates

Ratios or percentages used to distribute the costs of support departments to producing or service departments based on agreed-upon methods.

Operating Income

The amount of profit realized from a business's operations after deducting operating expenses such as wages, depreciation, and cost of goods sold.

Invested Assets

Resources such as securities and properties that an individual or organization allocates money into with the expectation of generating income or profit.