Question

US Weygandt, Managerial Accounting, se Help System Announcements CALCULATOR PRINTER VERSION < BACK NEXT CES Exercise 5-5 a1-a2 (Video) The controller of Hall Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs. Total Total Machine Maintenance costs Month Hours January $2,640 3,500 February 3,000 4,000 March 3,600 6,000 April 4,500 7,900 May 3,200 5,000 June 4,620 8,000 Study letoc Excha Determine the variable-cost components using the high-low method (Round answer to 2 decimal places e.g. 2.25.) Variable cost per machine hour VIDEO SIMILAR EXERCISE LINK TO TEXT LINK TO TEXT 192 PS Determine the fixed cost components using the high-low method. Fixed costs Click if you would like to Show Work for this question. Doen Show Work VIDEO SIMILAR EXERCISE LINK TO TEXT LINK TO TEXT

Answer 1

$Variable Cost per Machine Hour = \frac{Highest Activity Cost - Lowest Activity Cost}{Highest Activity Hours- Lowest Activity Hours}$

$Variable Cost per Machine Hour = \frac{\$4620- \$2640}{8000- 3500}$

$Variable Cost per Machine Hour = \frac{\$1980}{4500}$

Now by taking any (highest or lowest) activity hour as a base you can calcualte Fixed cost

I am solving to take Highest activity hours as a base

I hope this clear your doubt.

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