Exercise 18-3 The controller of Norton Industries has collected the following mo

Question

Exercise 18-3 The controller of Norton Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs. Month Total Maintenance Costs Total Machine Hours January $2,590 330 February 2,890 380 March 3,490 530 April 4,390 660 May 3,090 530 June 5,530 730 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 $ 6.837 LINK TO TEXT LINK TO TEXT 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

Variable cost = (5530-2590)/(730-330)= 7.350 Fixed costs = 5530-(730*7.35)= 165

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