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The controller of Norton Industries has collected the following monthly expense data for use in analyzing...

The controller of Norton 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 $2,590 330
February 2,890 380
March 3,490 530
April 4,390 660
May 3,090 530
June 5,530 730
Incorrect answer. Your answer is incorrect. Try again.
Determine the variable cost components using the high-low method. (Round variable cost to 3 decimal places e.g. 12.250.)
Variable cost per machine hour $

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Determine the fixed components using the high-low method. (Round answer to 0 decimal places e.g. 2,520.)
Total fixed costs $

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Answer #1

1) Variable cost per machine hour = ($5,530 - $2,590) / (730 - 330) = $7.350 per machine hour

2) Total fixed costs = $5,530 - (730 × $7.350) = $165

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