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Exercise 11-5 (Part Level Submission) The controller of Hall Industries has collected the following monthly expense...

Exercise 11-5 (Part Level Submission)

The controller of Hall Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs.

Month

Total
Maintenance Costs

Total
Machine Hours

January $6,770 6,300
February 7,720 7,200
March 10,680 10,800
April 13,822 14,220
May 9,100 9,000
June 14,060 14,400

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(a1)

Determine the variable-cost components using the high-low method. (Round variable cost to 2 decimal places e.g. 12.25.)
Variable cost per machine hour $

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Answer #1

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

=(14060-6770)/(14400-6300)

=$0.9 per machine hour.

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