Given the following cost and activity observations for Smithson Company\'s utili

Question

Given the following cost and activity observations for Smithson Company's utilities, use the high-low method to calculate Smithson's fixed costs per month. Round variable cost per unit to two decimal places in your calculations.
Cost Machine Hours January $52,200
20,000
February 75,000
29,000
March 57,000
22,000
April 64,000
24,500
a. $1,600
b. $22,800
c. $2,530
d. $50,600 Given the following cost and activity observations for Smithson Company's utilities, use the high-low method to calculate Smithson's fixed costs per month. Round variable cost per unit to two decimal places in your calculations.
Cost Machine Hours January $52,200
20,000
February 75,000
29,000
March 57,000
22,000
April 64,000
24,500

Cost Machine Hours January $52,200
20,000
February 75,000
29,000
March 57,000
22,000
April 64,000
24,500

Explanation / Answer

Hi, If you like my answer rate me lifesaver first...that way only I can earn points. Thanks Let the fixed cost be F and variable cost be V so, 75000 = 29000V + F 52200 = 20000V + F Gives us V = 2.53 Which gives us F = 1600

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