Question

Online beach na g mentMan.do invokeretakeAssignmentSessionLocator assignment-takenprogresse sing High-Low to Clot hed Cost Calculate the Variable , and Construct a Cost Function Puna ewa mas ped r as. Data for the past months were collected Month Labor Cost(5) Employee Hours January 350 February 7,000 7.531 3.140 9,787 300 11.240 490 July August 7.500 controller wants to calculate the feed and variable costs t ed with tabor in the rd In your round the variable rate per employee hour to the nearest centree Required: 1.Ung the o thed, calculate the cost of labor o od a t 2. Using the h the variable rate

Answer 1

As we know that,

the formula to calculate variable cost as per high-low method is = (Highest activity cost-lowest activity cost)/(highest activity hours-lowest activity hours).

i.e.....Highest activity cost=11240

        lowest activity cost =7000

        highest activity hours=490

        lowest activity hours=270

       therefore,

   1)    variable cost per hour as per high-low method =(11240-7000)/(490-270) = 19.27273

fixed cost as per high-low cost method is =highest activity cost-(variable cost per hour*highest activity hours)                                                                    = 11240-(490*19.273)                                                                      =1796.23       2) fixed cost per hour =total fixed cost/highest activity hours                                      = 1796.23/490                                     =3.666