The numbers of meals
served each week over the last seven weeks, along with the total costs of operating the
cafeteria are given below:
Assume that the relevant range includes all of the activity levels mentioned in this problem.
A. Use the high low method to establish the fixed and variable component of cafeteria
B. Express the fixed and variable components of cafeteria costs as a cost formula in the
linear form Y= a + Bx.
C. Using the cost formula you derived above, what cafeteria costs you would expect to
be incurred at the number of meals served are 2000 and 3500.
D. What is the major limitation of the high-low method?
EAB10603_Management Accounting 1
Genesis Wheels manufactures spoked and solid bicycle wheels. The company relies on an
activity based costing system. The following information has been provided for the cost
assembly / Polish
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MIS 790 Comprehensive Exam
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