Brief Exercise 22-4 Bruno Company accumulates the following data concerning a mi

Question

Brief Exercise 22-4 Bruno Company accumulates the following data concerning a mixed cost, using miles as the activity level. Miles Total Driven Cost Miles Total Driven Cost January 7,990 $14,100 March 8,490 $14,976 February 7485 13,468 April 8,190 14,485 Your answer is incorrect. Try again. Compute the variable cost per mile using the high-low method. (Round variable cost per mile to 2 decimal places e.g. 1.25.) 7.55 Your answer is incorrect. Try again. te the fixed cost elements using the high-low method ????

Explanation / Answer

Highest Total Cost = $14,976
Highest Miles Driven = 8,490
Lowest Total Cost = $13,468
Lowest Miles Driven = 7,485

Variable Cost per mile = (Highest Total Cost - Lowest Total Cost) / (Highest Miles Driven - Lowest Miles Driven)
Variable Cost per mile = ($14,976 - $13,468) / (8,490 - 7,485)
Variable Cost per mile = $1.50

Fixed Cost = Highest Total Cost - Highest Miles Driven * Variable Cost per mile
Fixed Cost = $14,976 - 8,490 * $1.50
Fixed Cost = $2,241

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