{"id":43212,"date":"2025-06-29T15:10:46","date_gmt":"2025-06-29T15:10:46","guid":{"rendered":"https:\/\/gaviki.com\/blog\/?p=43212"},"modified":"2025-06-29T15:10:47","modified_gmt":"2025-06-29T15:10:47","slug":"frazier-manufacturing-company-collected-the-following-production-data-for-the-past-month","status":"publish","type":"post","link":"https:\/\/gaviki.com\/blog\/frazier-manufacturing-company-collected-the-following-production-data-for-the-past-month\/","title":{"rendered":"Frazier Manufacturing Company collected the following production data for the past month"},"content":{"rendered":"\n
Frazier Manufacturing Company collected the following production data for the past month: Units Produced Total Cost 1,600 57,000 1,500 49,500 If the high-low method is used, what is the monthly total cost equation? a. Total cost = 36\/unit b. Total cost = 30\/unit c. Total cost = 45\/unit d. Total cost = 33\/unit<\/p>\n\n\n\n
The Correct Answer and Explanation is:<\/mark><\/strong><\/p>\n\n\n\n
To determine the total cost equation using the high-low method, we need to find the variable cost per unit and the total fixed cost. Here’s how we approach it:<\/p>\n\n\n\n
Step 1: Identify the high and low points<\/h3>\n\n\n\n
\n
High point<\/strong>: 1,600 units produced with a total cost of 57,000.<\/li>\n\n\n\n
Low point<\/strong>: 1,500 units produced with a total cost of 49,500.<\/li>\n<\/ul>\n\n\n\n
Step 2: Calculate the variable cost per unit<\/h3>\n\n\n\n
The formula for variable cost per unit is:Variable Cost per Unit=Change in Total CostChange in Units Produced\\text{Variable Cost per Unit} = \\frac{\\text{Change in Total Cost}}{\\text{Change in Units Produced}}Variable Cost per Unit=Change in Units ProducedChange in Total Cost\u200b<\/p>\n\n\n\n
Using the data from the high and low points:Change in Total Cost=57,000\u221249,500=7,500\\text{Change in Total Cost} = 57,000 – 49,500 = 7,500Change in Total Cost=57,000\u221249,500=7,500Change in Units Produced=1,600\u22121,500=100\\text{Change in Units Produced} = 1,600 – 1,500 = 100Change in Units Produced=1,600\u22121,500=100<\/p>\n\n\n\n
Now, calculate the variable cost per unit:Variable Cost per Unit=7,500100=75\\text{Variable Cost per Unit} = \\frac{7,500}{100} = 75Variable Cost per Unit=1007,500\u200b=75<\/p>\n\n\n\n
So, the variable cost per unit is 75.<\/p>\n\n\n\n
Step 3: Calculate the total fixed cost<\/h3>\n\n\n\n
Next, we use the total cost equation to find the fixed cost. The total cost is made up of the fixed cost plus the variable cost per unit multiplied by the number of units produced.<\/p>\n\n\n\n
Using the high point (1,600 units, 57,000 total cost):Total Cost=Fixed Cost+(Variable Cost per Unit\u00d7Units Produced)\\text{Total Cost} = \\text{Fixed Cost} + (\\text{Variable Cost per Unit} \\times \\text{Units Produced})Total Cost=Fixed Cost+(Variable Cost per Unit\u00d7Units Produced)57,000=Fixed Cost+(75\u00d71,600)57,000 = \\text{Fixed Cost} + (75 \\times 1,600)57,000=Fixed Cost+(75\u00d71,600)57,000=Fixed Cost+120,00057,000 = \\text{Fixed Cost} + 120,00057,000=Fixed Cost+120,000Fixed Cost=57,000\u2212120,000=0\\text{Fixed Cost} = 57,000 – 120,000 = 0Fixed Cost=57,000\u2212120,000=0<\/p>\n\n\n\n
Step 4: Formulate the cost equation<\/h3>\n\n\n\n
Now, we can formulate the total cost equation as follows:Total Cost=75\u00d7Units Produced\\text{Total Cost} = 75 \\times \\text{Units Produced}Total Cost=75\u00d7Units Produced<\/p>\n\n\n\n
This means the total cost equation is:Total Cost=75\u00d7Units Produced\\text{Total Cost} = 75 \\times \\text{Units Produced}Total Cost=75\u00d7Units Produced<\/p>\n\n\n\n
Therefore, the correct option is none of the given options<\/strong>. The variable cost per unit is 75, but the provided options don’t match this result.<\/p>\n\n\n\n<\/figure>\n","protected":false},"excerpt":{"rendered":"
Frazier Manufacturing Company collected the following production data for the past month: Units Produced Total Cost 1,60057,000 1,50049,500 If the high-low method is used, what is the monthly total cost equation? a. Total cost =36\/unit b. Total cost =30\/unit c. Total cost =45\/unit d. Total cost =33\/unit The Correct Answer and Explanation is: To determine […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-43212","post","type-post","status-publish","format-standard","hentry","category-quiz-questions"],"_links":{"self":[{"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/posts\/43212","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/comments?post=43212"}],"version-history":[{"count":1,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/posts\/43212\/revisions"}],"predecessor-version":[{"id":43214,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/posts\/43212\/revisions\/43214"}],"wp:attachment":[{"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/media?parent=43212"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/categories?post=43212"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/tags?post=43212"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"\"](\"https:\/\/gaviki.com\/blog\/wp-content\/uploads\/2025\/06\/learnexams-banner5-441.jpeg\")
<\/figure>\n","protected":false},"excerpt":{"rendered":"