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Ostrovityanka [42]
3 years ago
7

Using the high-low method, the estimated variable cost per machine hour for utilities is:__________.

Business
1 answer:
arlik [135]3 years ago
6 0

Question Completion:

The following information is available for a company's utility cost for operating its machines over the last four months.

Month Machine hours Utility cost

January       900            $5,450

February     1,800            $6,900

March    2,400             $8,100

April       600            $3,600

Answer:

Using the high-low method, the estimated variable cost per machine hour for utilities is:__________.

a) $2.50.

Explanation:

a) Data and Calculations:

Month Machine hours Utility cost

January       900            $5,450

February     1,800            $6,900

March    2,400             $8,100

April       600            $3,600

b) Highest and Lowest:

Month Machine hours Utility cost

March     2,400             $8,100

April        600            $3,600

Differences 1,800                    $4,500

Estimated variable cost = $4,500/1,800 = $2.50

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