Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to...

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Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to...

Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to calculate Bounty's variable utilities cost per machine hour. Round to the nearest cent.

	Cost	Machine Hours
March	$3,050	15,063
April	2,613	9,686
May	2,892	12,392
June	3,843	18,245

a.$0.14

b.$1.01

c.$0.97

d.$1.58

business accounting

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Answer 1

Answer #1

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

=(3843-2613)/(18245-9686)

which is equal to

=$0.14 per machine hour(Approx).

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Answer 2

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