Answer:
Total costs= $148,000
Explanation:
Giving the following information:
Sheridan Company’s high and low level of activity last year was 57000 units of product produced in May and 14000 units produced in November. Machine maintenance costs were $152800 in May and $49600 in November.
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ highest activity units - Lowest activity units)
Variable cost per unit= (152,800 - 49,600)/(57,000 - 14,000)= $2.4
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 152,800 - (2.4*57000)= 16,000
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 49,600 - (2.4*14,000)= 16,000
55,000 units:
Total costs= 55,000*2.4 + 16,000= $148,000
