Homework Answers
Answer: A. $0.13
Explanation:
Highest activity level = 25,000 machine hrs , $4,500
Lowest activity level = 22,000 machine hrs , $4,100
Variable cost per machine hour = (Highest activity cost - Lowest activity cost) / (Highest activity units - Lowest activity units)
= ($4,500 - $4,100) / (25,000 machine hrs - 22,000 machine hrs)
$400 / 3,000 machine hrs
= $0.13
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