During the sixth month of the fiscal year, the program director of the Westchester

Home-Delivered Meals (WHDM) program decides to again recompute fixed costs,
variable costs, and the BEP using the high–low method. Here are the number of
meals served and the total costs of the program for each of the first six months:
Month Meals Served Total Costs
July 3,500 $20,500
August 4,000 22,600
September 4,200 23,350
October 4,600 24,500
November 4,700 25,000
December 4,900 26,000
Recompute fixed costs, variable costs, and the BEP. What are the variable
costs? What are the fixed costs? How many meals will the WHDM program need
to provide during the fiscal year to reach the BEP? How much profit will the program
earn if it completes its 45,000-meal contract with the City of Westchester?

To recompute fixed costs, variable costs, and the break-even point (BEP) using the high-low method, we need to find the variable cost per meal and then use it to calculate the fixed costs and BEP.

Step 1: Find the high and low points
The high and low points in the data are used to determine the variable cost per meal. In this case, the high and low points are:
High: December - 4,900 meals ($26,000 total costs)
Low: July - 3,500 meals ($20,500 total costs)

Step 2: Calculate the variable cost per meal
To find the variable cost per meal, we subtract the total fixed costs from the total costs associated with the high or low point. Assuming the fixed costs remain constant, we have:
Variable cost per meal = (Total costs at high point - Fixed costs) / Number of meals at high point
Variable cost per meal = ($26,000 - Fixed costs) / 4,900 meals

Step 3: Calculate the fixed costs
Fixed costs can be calculated by subtracting the variable costs from the total costs at either the high or low point. Using the high point:
Fixed costs = Total costs at high point - (Variable cost per meal x Number of meals at high point)

Step 4: Calculate the BEP
The break-even point is the number of meals that need to be served to cover the total costs, including fixed costs. To calculate the BEP, we divide the fixed costs by the variable cost per meal:
BEP = Fixed costs / Variable cost per meal

Now let's find the answers to your specific questions:

1. What are the variable costs?
Using the high-low method, the variable costs can be calculated based on the variable cost per meal. So we need to find the variable cost per meal first by following steps 1 and 2.

2. What are the fixed costs?
We need to calculate the fixed costs by following steps 3.

3. How many meals will the WHDM program need to provide during the fiscal year to reach the BEP?
We will calculate the break-even point (BEP) by following step 4.

4. How much profit will the program earn if it completes its 45,000-meal contract with the City of Westchester?
To calculate profit, we need to subtract the total costs from the revenue generated by the 45,000-meal contract.

Please provide the fixed costs and I will calculate the variable costs and the answers to the remaining questions.