169 mccartney services has a customer web site to take orders answer customer questi 4308111

169 mccartney services has a customer web site to take orders answer customer questi 4308111

169) McCartney Services has a customer Web site to take orders, answer customer questions, and address customer complaints. The costs associated with this customer Web site over the past six months are listed below:

Month

Customer Web site costs

Number of Web site hits

January

$8,960

11,600

February

$8,762

11,270

March

$9,032

11,720

April

$8,942

11,570

May

$8,420

10,700

June

$8,492

10,820

Management at McCartney Services believes that the customer Web site costs are a mixed cost and would like to use the high-low method to estimate their future costs using the number of Web site hits in any given month as the cost driver.

Required:

1.Using the high-low method, estimate the variable cost per Web site hit and the monthly fixed costs associated with the customer Web site.

2.Use the results you computed in Requirement 1 to write the cost equation to estimate the customer Web site expenses for McCartney Services.

3.If McCartney Services expects 9,500 Web site hits for July, what are their anticipated customer Web site costs for July?

170) The following is information about the units produced and the total manufacturing costs for Rose's Rug Company for the past six months.

Month

Number of units produced

Total manufacturing costs

January

28,700

$61,400

February

31,000

$66,000

March

25,500

$55,000

April

26,000

$56,000

May

30,000

$64,000

June

29,000

$62,000

Rose's Rug Company uses the high-low method to estimate its costs. Answer the following questions:

a.What is the variable cost per unit?

b.What is the monthly fixed manufacturing cost?

c.Write the cost equation that could be used to predict Rose's Rug Company's total manufacturing costs.

d.What will the total monthly manufacturing costs be if the company produces 28,000 units?

 

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