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For the past 8 months: Machine-Hours Maintenance Cost This is all the given info!! March 4,440...

For the past 8 months: Machine-Hours Maintenance Cost This is all the given info!!
March 4,440 $50,950
April 4,431 $50,877
May 4,412 $50,696
June 4,460 $51,113
July 4,414 $50,711
August 4,433 $50,900
September 4,443 $50,976
October 4,415 $50,730
November 4,391 $50,530
Management believes that maintenance cost is a mixed cost that depends on machine-hours
Using the high-low method, calculate
(a) Variable cost per machine-hour
(b) Fixed cost per month
(c) What would total costs be for a month with 4,000 machine-hours?

Solutions

Expert Solution

Month Hours Cost
March $      4,440 $           50,950
April $      4,431 $           50,877
May $      4,412 $           50,696
June $      4,460 $           51,113
July $      4,414 $           50,711
August $      4,433 $           50,900
September $      4,443 $           50,976
October $      4,415 $           50,730
November $      4,391 $           50,530
High $      4,460 $           51,113
Low $      4,391 $           50,530
Variable cost $           8.4493
= (51113-50530)/(4460-4391)
Fixed cost $           13,429
= 51113-4460 × 8.45
Equation= Cost   =   8.4493 × Hours + 13429.23
Cost at 4000 hours: $     47,226.33
[ 4000 * 8.4493 + 13429.23

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ekkarill92 answered 2 years ago
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