The following information is available for a company's utility cost for operating its machines over the last four months.

Month Machine hours Utility cost
January 1,020 $6,570
February 1,920 $7,140
March 2,640 $8,100
April 720 $4,500

Using the high-low method, the estimated variable cost per machine hour for utilities is:

Using the high-low method, the estimated variable cost per machine hour for utilities is $1.875/ machine hour

Explanation:

High Low Method is a method used to separate Fixed and Variable Costs Components of a semi-variable cost/overhead.

Step 1 : Establish 2 points - The Highest and The Lowest

High - March 2,640 hrs : $8,100

Low - April 720 hrs : $ 4,500

Step 2 Calculate the variable Cost Component

Variable Costs = Overhead Cost difference /Activity difference

                        = ($8,100-$4,500)/(2,640hrs-720hrs)

                        = $3,600/1,920hrs

                        = $1.875/hr

you get one warning and if you do something to violate the guidelines of after that you get kicked off.

mark as

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

your welcome leave a rate and a < 3