Answer:
Fixed Component of the selling, general adn adminsitrative cost 147,000
Explanation:
We calculate the fixed cost using the high low method.
We subtract high from low the difference is that 1,000 units generates 21,100 dollars of cost
variable cost per unit then will be:
21,100 / 1,000 = 21.1
we now calculate fixed cost:
Total cost = variable x Q + fixed cost
When Q = 6,000 total cost: 294700
294,700 = 21.1 (6,000) + Fixed Cost
Fixed Cost = 147,000
Answer:
Answer is explained in the explanation section.
Explanation:
Solution:
Data Given:
Price of Oven Only = $800
Price of Oven with installation services = $850
Price of Oven with maintenance services = $975
Price of Oven with Installation and maintenance = $1000
So, with this data, we can calculate the total price of the oven:
Total Price = $800 + 50 + 175 = 1025
Now, we need to find out the allocation of price to the oven by using the following formula:
PA = Price Allocation
PA = (Price of Oven Only divided by Total Price) multiplied by the Price paid by the customer.
So,
We have all the values, just plugging in the above equation:
PA = x $1000
PA = $780.48 is the price allocation for Oven.
Similarly, we need to find the Price allocation of maintenance services:
PA = (Price of maintenance Only divided by Total Price) multiplied by the Price paid by the customer.
PA = x 1000
PA = $170.73 is the amount that must be allocated to the maintenance services.
Similarly, for Installation services:
PA = (Price of installation Only divided by Total Price) multiplied by the Price paid by the customer.
PA = x 1000
PA = $48.78 is the price allocation for installation services.