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Use the following information to answer the questions. Month January February March April May June July August September OctoRequired: 1. Using the high-low method, estimate the fixed cost of utilities per month and the variable cost of utilities per

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Answer #1

Variable cost = (Cost at highest activity - Cost at lowest activity) /(Highest activity-Lowest activity)

= (10,984 - 2176)/(4310-640)

= 2.40

Fixed cost = Total cost - Variable cost

= 10,984 - (4310*2.40)

= 640

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