12) 11) Barkoff Enterprises, which uses the high-low method to analyze cost beha
ID: 2511939 • Letter: 1
Question
12) 11) Barkoff Enterprises, which uses the high-low method to analyze cost behavior, has determined that machine hours best explain the company's utilities cost. The company relevant range of activity varies from a low of 600 machine hours, with the following data being available for the first six months of the machine hours to a high of 1,100 year Month January February March April May Utilities S 8,700 8,360 8,950 9.360 9.625 9,150 Machine Hours 800 720 S10 920 950 900 June The fixed utilities cost per month for Barkoff is: A) $4,400. B) $5,1 00. C) $4,760. D) $3,764. E) None of the answers is correct. 12) Which of the following techniques is not used to analyze cost behavior? 12) A) Least-squares regression. B) Visual-fit method. C) High-low method. D) Multiple regression. E) Linear programming. 13) The high-low method and least-squares regression are used by accountants to: 13) A) maximize output. B) choose among alternative courses of action. C) control operations. D) estimate costs. E) evaluate divisional managers for purposes of raises and promotions. 14) The break-even point is that level of activity where 14) A) sales revenue equals total variable cost. B) total revenue equals total cost. C) total contribution margin equals the sum of variable cost plus fixed cost. D) profit is greater than zero. E) variable cost equals fixed cost.Explanation / Answer
1. The highest utility cost is at 950 hours. The lowest utlity cost is at 720 hours.
Variable cost per hour=(9625-8360)/(950-720)=$5.5 per hour
Thus, the variable cost at 950 hours=950*$5.5 per hour=$5225
Thus, the fixed cost =$9625-$5225=$4400
The correct option is A.
12) Out of the methods mentioned above , all are used to analyze cost behavior except linear programming.
Thus, correct option is E.
13) The high low method and least square regression are used by accountants to estimate costs.
Thus, correct option is D.
14) The break-even point is that level of activity where total revenue equals total cost.
Thus, correct option is B.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.