best explain the machin uses the high-low method to analyze cost behavior, has d

Question

best explain the machin uses the high-low method to analyze cost behavior, has determined that machine hours e company's utilities cost. The company's relevant range of activity varies from a low of 600 utiliti months of the year: ir's to a high of 1,100 machine hours, with the following data being available for the first six Month January February March April May Utilities Machine Hours $8,700 8,360 8,950 9,360 9,625 9,150 800 720 810 920 950 900 June 12. The variable utilities cost per machine hour is: A. $0.18. B. $4.50 C. $5.00. D. $5.50 E. an amount other than those listed above.

Explanation / Answer

Ans 12 D) $ 5.50

Variable cost per unit = Highest difference between utilities Difference in relevant machine hours 9625 - 8360 950 - 720 1265 230 $ 5.50

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