Business, 06.07.2021 21:10 ijustneedhelp29

High-Low Method to Determine Fixed Cost and Variable Rate McGarvey Manufacturing Company had the following 12 months of data on purchasing cost and number of purchase orders.
Month Purchasing Cost Number of Purchase Orders
January $19,250 370
February 18,050 330
March 18,200 320
April 18,050 410
May 19,345 400
June 19,500 450
July 19,670 460
August 20,940 560
September 19,430 440
October 20,020 600
November 18,800 470
December 19,340 480
Required:
1. Determine the high point and the low point.
2. Calculate the variable rate for purchasing cost based on the number of purchase orders.
3. Calculate the fixed monthly cost of purchasing.
4. Write the cost formula for the purchasing activity showing the feed cost and the variable rate.
5. If McGarvey Manufacturing Company estimates that next month will have to purchase orders, what is the total estimated purchasing cost for that month?
6. What If McGarvey Manufacturing wants to estimate purchasing cost for the coming year and expects 6,000 purchase orders? What will estimated total purchasing cost be?
What is the total fixed purchasing cost?
Why doesn't it equal the fixed cost calculated in Requirement 3 above?

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High-Low Method to Determine Fixed Cost and Variable Rate McGarvey Manufacturing Company had the fo...

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