Month Pizza Production Costs (RM) Number of Pizzas Produced 1 30,800 13,300 42,100 15,400 3 33,400 12,600 4 33,000 -12,500 5 36,600 14,800 31,200 9,800 7 30,400 9,800 8 34,100 10,200 9. 41,300 14,700 10 27,560 8,400 All computations are to be rounded up to its nearest 2 decimal points. Required: a. Use the high-low method to estimate the fixed and variable portions of overhead costs based on number of pizzas produced. b. What is the estimated total variable cost for a month in which 5,000 pizzas are produced? c. CPSB has heard that the high-low method has a major limitation compared to simple regression. What is it?

Month Pizza Production Costs (RM) Number of Pizzas Produced 1 30,800 13,300 42,100 15,400 3 33,400 12,600 4 33,000 -12,500 5 36,600 14,800 31,200 9,800 7 30,400 9,800 8 34,100 10,200 9. 41,300 14,700 10 27,560 8,400 All computations are to be rounded up to its nearest 2 decimal points. Required: a. Use the high-low method to estimate the fixed and variable portions of overhead costs based on number of pizzas produced. b. What is the estimated total variable cost for a month in which 5,000 pizzas are produced? c. CPSB has heard that the high-low method has a major limitation compared to simple regression. What is it?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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