The controller of Norton Industries has collected the following monthly expense

Question

The controller of Norton Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs Total Maintenance Costs Month anuary February March April May June $2,930 3,230 3,830 4,730 3,430 5,840 Total Machine Hours 350 400 550 640 550 750 Determine the variable cost components using the high-low method. (Round variable cost to 3 decimal places e.g. 12.250.) Variable cost per machine hour LINK TO TEXT LINK TO TEXT VIDEO: APPLIED SKILLS Determine the fixed cost components using the high-low method. (Round answer to 0 decimal places e.g. 2,520.) Total fixed costs

Explanation / Answer

Variable cost per machine hour = Change in cost /Change in hour

                                                    = (5840-2930)/(750-350)

Variable cost per machine hour = 7.275 per machine hour

Fixed cost = 5840-(750*7.275) = 384

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