# 1.&nbspHigh-lowmethodThe following cost data pertain to 20X6 op

1. High-lowmethodThe following cost data pertain to 20X6 operations of Heritage Products: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Shipping costs \$58,200 \$58,620 \$60,125 \$59,400 Orders shipped 120140175150Thecompany uses the high-low method to analyze costs. a. Determine the variablecost per order shipped. b. Determine the fixedshipping costs per quarter. c. If present costbehavior patterns continue, determine total shipping costs for 20X7 if activityamounts to 570 orders. 2. Break-evenand other CVP relationships Cedars Hospital has averagerevenue of \$180 per patient day. Variable costs are \$45 per patient day; fixedcosts total \$4,320,000 per year. a. How many patient days does thehospital need to break even? b. What level of revenue is needed toearn a target income of \$540,000? c. If variable costs drop to \$36 perpatient day, what increase in fixed costs can be tolerated without changing thebreak-even point as determined in part (a)? 3. Direct and absorption costing The information that followspertains to Consumer Products for the year ended December 31, 20X6. Inventory, 1/1/X6 24,000 units Units manufactured 80,000Units sold 82,000Inventory, 12/31/X6 ? units Manufacturing costs: Direct materials \$3 per unit Direct labor \$5 per unit Variable factory overhead \$9 per unit Fixed factory overhead \$280,000 Selling & administrative expenses: Variable \$2 per unit Fixed \$136,000 The unit selling price is \$26.Assume that costs have been stable in recent years.Instructions:a. Compute the number of units in theending inventory.b. Calculate the cost of a unitassuming use of:1. Direct costing.2. Absorption costing.c. Prepare an income statement forthe year ended December 31, 20X6, by using direct costing.d. Prepare an income statement forthe year ended December 31, 20X6, by using absorption costing.