Please answer B. If possible, please explain how the problem was solved. Thanks!

Question

Please answer B. If possible, please explain how the problem was solved. Thanks!

Crane, Inc., has collected the following information on its cost of electricity: Machine HoursTotal Electricity Costs 520 540 350 460 680 710 330 540 260 740 860 $250 $290 $190 $210 $270 $350 $160 $250 $132 $330 $360 $330 January February March April May une July August September October November December Your answer is correct Using the high-low method, compute the variable cost of electricity per machine hour. (Round 5 unit cost to 2 decimal places, e.g. 52.75.) Variable cost Click if you would like to Show Work for this question per machine hour Open Show Work Compute the total fixed cost of electricity. (Round answer to 2 decimal places, e.g. 52.75.) Fixed cost

Explanation / Answer

a) Calculate variable cost per machine hour :

Variable cost per machine hour = Change in cost/change in machine hour

= (360-132)/(860-260)

Variable cost per machine hour = 0.38 per machine hour

B) FIxed cost = Total cost-variable cost

= 360-(860*.38)

Fixed cost = 33.20

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