ACCT 202-Routh, Summer 2018 (online) ? ? Test: Exam odule 3 - ch. 6, 7) Time Lim

Question

ACCT 202-Routh, Summer 2018 (online) ? ? Test: Exam odule 3 - ch. 6, 7) Time Limit: 02:00:00 Submit Test This Question: 5 pts This Test 43 pts possible Smith Company, which uses the high-low method to analyze cost behavior, has determined that machine hours best predict the companys total utilies cost The the year follow EE (Click the icon to view the data ) Requirements Using the high-low method, answer the following questions. 1. What is the variable utilities cost per machine hour? 2. What is the fixed cost of utilities each month? Requirement 1 Let's begin by determining the formula that is used to calculate the variable cost (slope) Change in cost Round the variable cost to the nearest cent) Using the high-low method, the variable utilities cost per machine hour is S 17 Choose from any list or enter any number in the input fields and then continue to the next question

Explanation / Answer

Cost Machine Hrs High Activity-June 4232 1460 Low Activity-march 3467 1,010 Change 765 450 Variable cost per MH= Change in cost    / Change in Volume    765 / 450 = 1.70 per MH Fixed cost = Total cost   -Total Variable cost 4232 -   (1460*1.70) = $ 1750 Total cost of 1230 MH: Variable cost (1230 MH @ 1.70) 2091 Add: Fixed cost 1750 Total cost of 1230 MH: 3841

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