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Homework answers / question archive / Dynamic Trainers provides a personalized training program that is popular with many companies
Dynamic Trainers provides a personalized training program that is popular with many companies. The number of programs offered over the last five months, and the costs of offering these programs are as follows:
Programs Offered Costs Incurred 4an 55 $15,900 ei 95 19,050 60 18,000 lApril 50 19,700 75 19,000
Explain how to compute the variable cost per program and the total fixed cost per month using the high-low method,
Computation of Variable Cost per Program and Total Fixed Cost per Month using the High-low method:
Variable Cost per Program = (Highest Cost-Lowest Cost)/(Highest Capacity Level - Lowest Capacity Level)
= ($19,000-$14,050)/(75-45)
= $4,950/30
Variable Cost per Program = $165
Fixed Cost per Month = Highest Cost - (Highest Capacity Level*Variable Cost per Program)
= $19,000-(75*$165)
= $19,000-$12,375
Fixed Cost per Month = $6,625