Problem 4-3 High-Low, Break-Even,,Lancer Audio produces a high-end DVD player that sells for $1,250. Total operating expenses for the past 12 months are as follows:,,, Units Produced and Sold Cost,August 125 $112,670,September 145 $121,990,October 150 $129,500,November 160 $131,500,December 165 $139,700,January 140 $117,400,Febrauary 145 $125,600,March 135 $115,400,April 130 $116,140,May 135 $119,220,June 145 $121,700,July 140 $119,050,,A: Use the high-low method to estimate fixed and variable costs.,,B: Based on these estimates, calculate the breal-even level of sales in units.,,C: Calculate the margin of safety for the coming August assuming estimated sales of 160 units.,,D: Estimate total profit assuming production and sales of 160 units.,,E: Comment on the limitations of the high-low method in estimating costs for Lancer Audio.
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