Hich uses the high-low method to analyze cost behavior, has determined that machine hours best predict the company's total utilities cost. The company's cost and machine hour usage data for the first six months of the year follow: LOADING...(Click the icon to view the data.) Requirements Using the high-low method, answer the following questions: 1. What is the variable utilities cost per machine hour? 2. What is the fixed cost of utilities each month? 3. If Smith Company uses 1 comma 220 machine hours in a month, what will its total costs be?

1)- Variable utilities cost per machine hour = 1.6 per machine hour

2)- Fixed cost = 1740

3)-Total cost on 1220 Machine hour will be

= 3692

Step-by-step explanation:

1) CALCULATE VARIABLE UTILITIES COST PER MACHINE HOUR :

Variable utilities cost per machine hour = Change in cost/high machine hour-low machine hour

=4076-3388/1460-1030

Variable utilities cost per machine hour = 1.6 per machine hour

2) Fixed cost = Total cost-variable cost

= 3388-(1030*1.6)

Fixed cost = 1740

3) Total cost on 1220 Machine hour will be (1220*1.6+1740) = 3692

the answer is b

26

step-by-step explanation: