Question

Question no. iv and v are based on the following information. The Rockhampton Toy Factory has determined machine hours to be the cost driver for the company's electricity costs. During the first six months of the year the company incurred the following electricity costs: Month Machine Hours Electricity Cost Jan 390 Rs.4.350 Feb Mar (360400 Rs.4.180 Rs.4,475 il.61 1.18 Apr May Jun 450 476 460 Rs.4,680 Rs.4,818 Rs.4,875

Answer 1

Accodding te High-low Method :- Variable cost = High - low Cost - ost High - low Hours Howrs. 4818 - 4180 14476 -360 2 638 5.5 rivo What is Fixed cost = ? - Total cost=4878 when we utilize Machine for 476 Hours what is Fixed cost. 4818 = 476 % + 1/2

421849695) + y - 4818 = 2618 ty 42200 (iv) that means Fixed cost / c. 2200||| V that means total cost bauestin. total cost o 2200 + 5.50 w) -- PO ADYOXDU 2 No. of maching hours i total cost=9200 + 5.5 (490) = 2200 +2695 4895 d. 48.95 a total cost TI

So for (iv) c.2200

(v) a.4895