Exercise 18-5 (Part Level Submission) The controller of Hall Industries has coll

Question

Exercise 18-5 (Part Level Submission) The controller of Hall Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs Total Maintenance Costs Total Machine Hours Month January February March April May June $3,192 3,627 4,352 5,440 3,869 5,586 4,231 4,836 7,254 9,551 6,045 9,672 (a1) Your answer is incorrect. Try again Determine the variable-cost components using the high-low method. (Round variable cost to 2 decimal places e.g. 12.25.) Variable cost per machine hour 150

Explanation / Answer

From the above Low Cost is in the month of january and high cost is in the month of june

Variable Cost = Change in Cost / Change in Activity

= (5586-3192) / (9672-4231)

= $0.44 per machine hour

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