Question 1 The controller of Norton Industries has collected the following month

Question

Question 1 The controller of Norton Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs Total Maintenance Costs Total Machine Hours Month January February March April May June $2,930 3,230 3,830 4,730 3,430 5,840 350 400 550 640 550 750 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 Determine the fixed cost components using the high-low method. (Round answer to 0 decimal places e.g. 2,520.) Total fixed costs

Explanation / Answer

Cost at highest level of activity                  5,840.00 Cost at Lowest level of activity                  2,930.00 Highest level of activity                     750.00 Lowest Level of activity                     350.00 Variable cost per unit = (5840-2930)/(750-350) Variable cost per unit = 2910/400 Variable cost per unit = $7.275 Fixed Costs = 5840-750*7.275 Fixed Costs = $384 So Variable cost per machine hour is $7.275 Total Fixed costs are $384

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.