Given the following cost and activity observations for Smithson Company\'s utili

Question

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 variable cost per unit to two decimal places in your calculations. Cost Machine Hours January $52,200 20,000 February 75,000 29,000 March 57,000 22,000 April 64,000 24,500 a. $2,530 b. $22,800 c. $1,600 d. $50,600 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 variable cost per unit to two decimal places in your calculations. Cost Machine Hours January $52,200 20,000 February 75,000 29,000 March 57,000 22,000 April 64,000 24,500 Cost Machine Hours January $52,200 20,000 February 75,000 29,000 March 57,000 22,000 April 64,000 24,500

Explanation / Answer

Hi, If you like my answer rate me lifesaver first...that way only I can earn points. Thanks Let the fixed cost be F and variable cost be V so, 75000 = 29000V + F 52200 = 20000V + F Gives us V = 2.53 Which gives us F = 1600

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