Answer 1
Maintenance cost = $ 153,000
Calculations:
Machine hours | 60,000 | 90,000 |
Total cost | $ 174,000 | $ 246,000 |
Utilities | $ 48,000 | $ 72,000 |
Supervisor | $ 21,000 | $ 21,000 |
Maintainence | $ 105,000 | $ 153,000 |
Answer 2
Lowest range | Highest range | |
Cost | $ 105,000 | $ 153,000 |
Hours | $ 60,000 | $ 90,000 |
As per High Low Method, |
Variable cost per hour = Change in costs / change in hours |
Variable cost per hour = (153,000-105,000)/(90,000-60,000) |
Variable cost per hour = 48,000/30,000 |
Variable cost per hour = $ 1.6 |
Fixed Cost = Total Cost - Variable Cost |
Fixed Cost = Total Cost - (Variable Cost per hour * hours) |
Fixed Cost = 153,000-(1.6*90,000) |
Fixed Cost = $ 9000 |
Answer 3
Total cost = ($ 9,000 + $ 21,000)+ ($ 1.6 +0.8)* Hours
Total cost = $ 30,000 + $ 2.4 * Hours
Answer 4
Total cost = $ 30,000 + $ 2.4 * Hours
= $ 30,000 + 2.4 * 75,000
= $ 210,000
In case of any doubt, please comment.
Fol variable and fixed costs!) w Method of cost analysis estimate a cost formula for maintenance...
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