Essay
Buxton Office Supply Company has the following information available regarding costs and revenues for two recent months.Selling price is $20.
| March | April | |
| Sales revenue | $60,000 | $100,000 |
| Cost of goods sold | -36,000 | - 60,000 |
| Gross profit | $24,000 | $ 40,000 |
| Less other expenses: | ||
| Advertising | $ 600 | $ 600 |
| Utilities | 4,200 | 5,600 |
| Salaries and commissions | 3,200 | 4,000 |
| Supplies (bags, cleaning supplies etc.) | 320 | 400 |
| Depreciation | 2,300 | 2,300 |
| Administrative costs | 1,900 | 1,900 |
| Total | -12,520 | -14,800 |
| Net income | $11,480 | $25,200 |
c. What is the total cost equation?
d. Estimate total cost if sales
Required:
a. Identify each of the company's expenses (including cost of goods sold) as being either variable, fixed, or mixed.
b. By use of the high-low method, separate each mixed expense into variable and fixed elements. State the cost formula for each mixed expense.
c. What is the total cost equation?
d. Estimate total cost if sales = $75,000.
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a. Identify each of the comp...
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