The document provides information to estimate supplies costs for 20,000 units of production using the high-low method. It details the total costs and units produced for the first three months, with March being the highest at 27,000 units and $82,000 in costs and January being the lowest at 12,000 units and $40,000 in costs. Using this data, it calculates the variable cost per unit as $2.80. It then estimates that supplies costs for 20,000 units would be $56,000 in variable costs plus $6,400 in fixed costs, for a total estimated cost of $62,400.

1. urgent pls accounting
The following information is available for supplies costs for the first three months of the year.
What is the estimated supplies cost at 20,000 units of production? (Hint: use high low technique)
methods
Solution
Calculation of variable cost oper unit and total fixed cost using high low method For Salaries and
commission Units Total Cost At high level (March) 27000 $Â Â Â Â Â Â Â Â 82,000 Al low
level (January) 12000 $Â Â Â Â Â Â Â Â 40,000 Difference 15000 $Â Â Â Â Â Â Â Â
42,000 Variable cost per unit = 42000 / 15000 $Â Â Â Â Â Â Â Â Â Â Â Â Â 2.80 Total cost
at 12000 units $Â Â 40,000.00 Total variable cost at 12000 units = 12000*2.80 $Â Â 33,600.00
Fixed cost = total - variable = 40000 - 33600 $Â Â Â Â Â 6,400.00 Calculation of supplies cost
for 20000 units Variable cost = 20000 units * $2.80 $Â Â 56,000.00 Fixed cost $Â Â Â Â Â
6,400.00 Total Cost $Â Â 62,400.00