Compton Company Is a Wholesale Distributor of Educational CD-ROMs -Using the High-Low Method of Analysis, What Are the Company's

Compton Company is a wholesale distributor of educational CD-ROMs. The company's records indicate the following: $\begin{array}{lrr}&\text { This Year}&\text { Last Year }\\ \text { Units Sold } &250,000&200,000\\ \text { Sales Revenue } & £ 1,250,000 &£ 1,000,000\\ \text { Less: Cost of Goods Sold } &\underline{875,000} &\underline{ 700,000} \\ \text {Gross Margin } &375,000 & 300,000 \\ \text {Less: Operating Expenses } &\underline{222,000} &\underline{210,000}\\ \text {Net Operating Income } &£ 153,000& £ 90,000\\\end{array}$


-Using the high-low method of analysis, what are the company's estimated total fixed operating expenses per year?

A) £60,000
B) £174,000
C) £150,000
D) £162,000

Correct Answer:

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