Estimate of total fixed costs

Reference no: EM13824460

Problem-

Oregon Manufacturing had the following data for the past three months.

	January	February	March
Sales in units	3000	3,750	4,500
Operating expenses	$272,000	$296,000	$320,000

Using the high-low method, estimate Oregon's total fixed costs, contribution margin ratio and break-even point in sales dollars for April. Oregon expects to sell 5,000 units for $50 per unit (this sales price is unchanged from month to month).
Project net income for April, given the information above and your computations.
Discuss strengths and weaknesses of applying the high-low method. Feel free to use the information provided above in your discussion. How could your analysis of costs be improved?

Additional information

The problem belongs to Accounting and it discusses about estimate of total fixed costs, contribution margin ratio and break-even point in sales, project net income, etc using high-low method.

Reference no: EM13824460

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