Sweet Copy & Printing wants to predict copy machine repair expense at different

Question

Sweet Copy & Printing wants to predict copy machine repair expense at different levels of copying activity (number of copies made). The following data have been gathered:

Determine the fixed and variable components of repair expense using the high-low method. Use copies made as the measure of activity. (Round variable component per copy to 2 decimal places, e.g. 0.15.)

Copy Machine Month Repair Expense Copies Made May $6,100 317,000 June 6,880 495,000 July 13,190 1,026,000 August 9,720 779,000 September 6,270 384,000

Explanation / Answer

Variable Component=[Total cost at highest level-Total cost at lowest level]/(Highest level-Lowest level)

=(13190-6100)/(1026000-317000)=$0.01

Fixed Component=13190-(1026000*0.01)=$2930.

Variable Component=[Total cost at highest level-Total cost at lowest level]/(Highest level-Lowest level)

=(13190-6100)/(1026000-317000)=$0.01

Fixed Component=13190-(1026000*0.01)=$2930.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

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