Estimate the variable and the fixed portions

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Question - You are working on the expenses of delivering outdoor and indoor furniture to customers. The expenses for six months is compiled in the table below.

Month Furniture delivered Delivery expense January 460 $3,900 February 340 $2,900 March 390 $3,270 April 600 $4,950 May 490 $4,050 June 450 $3,750 Total 2730 $22,820

Required -

a) Using the high-low method and the information provided in the table above, estimate the variable and the fixed portions of the delivery expense. Please show your calculations.

b) After reviewing the estimated delivery expenses using the high-low method, your supervisor has noted that the estimated expenses do not exactly match the actual expenses for all months on the table above. Why is this happening?

Reference no: EM132542708

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