Bill owns a machine shop. In reviewing the shop's utility bills for the past 12 months, he found that the highest bill of $2,800 occurred in August when the machines worked 1,200 machine hours. The lowest utility bill of $2,200 occurred in December when the machines worked 600 machine hours. Using the high-low method, the variable cost per machine hour is per machine hour and the total fixed utility cost is $1.20 and $1,530 $3,40 and $1,800 $1.50 and $1,700 $2.00 and $1,400 $1.00 and $1,600 身

Bill owns a machine shop. In reviewing the shop's utility bills for the past 12 months, he found that the highest bill of $2,800 occurred in August when the machines worked 1,200 machine hours. The lowest utility bill of $2,200 occurred in December when the machines worked 600 machine hours. Using the high-low method, the variable cost per machine hour is per machine hour and the total fixed utility cost is $1.20 and $1,530 $3,40 and $1,800 $1.50 and $1,700 $2.00 and $1,400 $1.00 and $1,600 身

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Using the high-low method Mark, owns a machine shop. In reviewing the shop’s utility bills for the past 12 months, he found that the highest bill of $2,600 occurred in August when the machines worked 1,200 machine hours. The lowest utility bill of $2,300 occurred in December when the machines worked 600 machine hours. Requirements Use the high—low method to calculate the variable cost per machine hour and the total fixed utility cost. Show the equation for determining the total utility cost for the machine shop. If Mark anticipates using 800 machine hours in January, predict the shop’s total utility bill using the equation from Requirement 2.
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