Los Angeles Company wants to conduct an analysis of the behavior of the maintenance cost of its factory equipment in relation to the number of units produced using such equipment. Historical cost and production data were gathered for the past 10 months.

Question

Question

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Los Angeles Company wants to conduct an analysis of the behavior of the maintenance cost of its factory equipment in

relation to the number of units produced using such equipment. Historical cost and production data were gathered for the

past 10 months.

Month Maintenance Cost Units Produced

March P 2,750 450

April 2,250 200

May 5,000 700

June 3,500 700

July 4,000 600

August 3,250 400

September 4,500 800

October 125 25

November 2,500 350

December 3,000 300

Required: Compute for the variable maintenance cost per unit and monthly fixed cost using high-low method.

Answer 1