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Triss [41]
3 years ago
5

The controller of Norton Industries has collected the following monthly expense data for use in analyzing the cost behavior of m

aintenance costs.
Month Total Maintenance Costs Total Machine Hours
January $2,700 300
February $3,000 350
March $3,600 500
April $4,500 690
May $3,200 500
June $5,500 700
1. Determine the variable cost components using the high-low method. (Round variable cost to 3 decimal places e.g. 12.250.)
Variable cost per machine hour $ _
2. Determine the fixed cost components using the high-low method. (Round answer to 0 decimal places e.g. 2,520.)
Total fixed costs $ _
Business
1 answer:
fomenos3 years ago
4 0

Answer:

Results are below.

Explanation:

Giving the following information:

January $2,700 300

February $3,000 350

March $3,600 500

April $4,500 690

May $3,200 500

June $5,500 700

<u>To calculate the variable and fixed costs, we need to use the following formulas:</u>

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (5,500 - 2,700) / (700 - 300)

Variable cost per unit= $7

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 5,500 - (7*700)

Fixed costs= $600

Fixed costs= LAC - (Variable cost per unit* LAU)

Fixed costs= 2,700 - (7*300)

Fixed costs= $600

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