Using the high-low method, the estimated variable cost per machine hour for utilities is:. a) $2.50.
b) $6.00.
c) $3.38.
d) $6.17.
e) $4.22.

Question Completion:

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

MonthMachine hoursUtility cost

January       900            $5,450

February     1,800            $6,900

March    2,400             $8,100

April       600            $3,600

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

a) $2.50.

Explanation:

a) Data and Calculations:

MonthMachine hoursUtility cost

January       900            $5,450

February     1,800            $6,900

March    2,400             $8,100

April       600            $3,600

b) Highest and Lowest:

MonthMachine hoursUtility cost

March     2,400             $8,100

April        600            $3,600

Differences 1,800                    $4,500

Estimated variable cost = $4,500/1,800 = $2.50

income statement is prepared in order to show the profits and loss of a business. in order to prepare the income statement she should collect all the income and expenses of the product with the cost of production.