Question

Fixed costs remain constant at​ $400,000 per month. During highminusoutput months variable costs are​ $320,000, and during lowminusoutput months variable costs are​ $80,000. What are the respective high and low indirectminuscost rates if budgeted professional laborminushours are​ 16,000 for highminusoutput months and​ 4,000 for lowminusoutput ​months? A. ​$45.00 per​ hour; $45.00 per hour B. ​$45.00 per​ hour; $120.00 per hour C. ​$25.00 per​ hour; $20.00 per hour D. ​$56.20 per​ hour; $120.00 per hour

Answer 1

Answer:

The answer is  B. ​$45.00 per​ hour; $120.00 per hour

Explanation:

highminusoutput

Fixed costs       400000/16000= $25

variable costs   320000/16000= $20

Total                                           =$45

lowminusoutput

Fixed costs        400000/4000  = $100

variable costs    80000/4000  = $20

Total                                           =$120