In the Vaughn, maintenance costs are a mixed cost. At the low level of activity (80 direct labor hours), maintenance costs are $600. At the high level of activity (500 direct labor hours), maintenance costs are $2750. Using the high-low method, what is the variable maintenance cost per unit and the total fixed maintenance cost?

The correct answer is $5.12 and $190.

Explanation:

According to the scenario, the given data are as follows:

Lowest direct labor hour = 80 direct labor hour

Lowest maintenance cost = $600

Highest direct labor hour = 500

Highest maintenance cost = $2,750

So, we can calculate the variable maintenance cost per unit by using following formula:

Variable maintenance cost = (Highest cost - Lowest cost) ÷ (Highest direct labor hour - lowest direct labor hour)

= ($2,750 - $600 ) ÷ ( 500 - 80)

= $2,150 ÷ 420

= $5.12

Now we can calculate the total fixed maintenance cost by using following formula:

Total cost = Variable cost + Fixed cost

$2,750 = ( 500 × $5.12) + Fixed cost

Fixed cost = $2,750 - $2,560

= $190

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hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi