High-low method | Business & Finance homework help
High-Low Method; Assistance format proceeds declaration
Alden assemblage has ruled to use a assistance format proceeds declaration for inner planning purposes.
The assemblage has analyzed its expenditures and has plain the forthcoming consume formulas:
Cost Consume Formula
Cost of goods sold $20 per individual sold
Advertising expenditure $170,000 per district
Sales office 5% of sales
Administrative expenditure 80,000 per district
Shipping expenditure ?
Depreciation expenditure 50,000 per district
Management has concluded that shipping expenditure is a adulterated consume, containing twain unsteady and unroving consume elements.
Units sold and the retaining shipping expenditure balance the ultimate 8 districts are ardent below:
Quarter Units Sold Shipping Expense
First 16000 160000
Second 18000 175000
Third 23000 217000
Fourth 19000 180000
First 17000 170000
Second 20000 185000
Third 25000 232000
Fourth 22000 208000
Management would approve a consume formula adventitious for shipping expenditure so that a budgeted assistance format proceeds declaration can be cheerful for the present district.
1. Using the high-low regularity, like a consume formula for shipping expenditure.
2. In the highest district of year 3, the assemblage plans to retail 21,000 individuals at the retailing charge of $50 per individual.
Prepare a Assistance Format Proceeds Declaration for the district.