Given the following cost and activity observations for Smithson Company's utilities, use the high-low method to...

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Given the following cost and activity observations for Smithson Company's utilities, use the high-low method to...

Given the following cost and activity observations for Smithson Company's utilities, use the high-low method to calculate Smithson's fixed costs per month. Round your final answer to the nearest dollar. Do not round interim calculations.

	Cost	Machine Hours
January	$26,200	9,500
February	35,900	17,500
March	28,400	12,300
April	30,400	15,100

a.$24,958

b.$14,681

c.$11,745

d.$46,979

business accounting

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Answer 1

Answer #1

High cost – Low cost / High hours – Low Hours

=35900-26200/17500-9500 = 9700/8000 =1.2125

Total Cost = X+(1.2125*17500)

35900 = x+21218.75

X= 35900-21218.75

=14681.25

The answer is b.14681

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Answer 2

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