Asked by Osano Enoch on Jun 19, 2024
Verified
In the Restin Company 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 (200 direct labor hours) maintenance costs are $1100. Using the high-low method what is the variable maintenance cost per unit and the total fixed maintenance cost? Variable Cost Per Unit Total Fixed Cost \begin{array}{cc} \text { Variable Cost Per Unit } & \text { Total Fixed Cost } \\\end{array} Variable Cost Per Unit Total Fixed Cost
A) $4.17$267\begin{array}{cc}&&\$ 4.17&&&&&& & \$ 267 \\\end{array}$4.17$267
B) $4.17$500\begin{array}{cc} &&\$ 4.17 &&&&&&& \$ 500\\\end{array}$4.17$500
C) $5.50$220\begin{array}{cc} &&\$ 5.50 &&&&&&&\$ 220 \\\end{array}$5.50$220
D) $5.50$400\begin{array}{cc}&&\$ 5.50&&&&&& &\$ 400\end{array}$5.50$400
High-Low Method
An accounting method used to estimate the fixed and variable components of a cost based on the highest and lowest levels of activity.
Variable Maintenance Cost
Costs that change in proportion to the operational activity of a company, such as repairs and maintenance expenses that vary with usage.
Mixed Cost
A cost containing both variable and fixed cost elements, changing in total with activity level but not proportionately.
- Use the high-low procedure to evaluate variable and fixed cost aspects based on available data.
Verified Answer
Learning Objectives
- Use the high-low procedure to evaluate variable and fixed cost aspects based on available data.
Related questions
Dollywood Corporation Accumulates the Following Data Concerning a Mixed Cost ...
Corris Co Accumulates the Following Data Concerning a Mixed Cost ...
Sandburg Manufacturing Manufactures a Single Product Instructions Calculate the Expected ...
Bill Braddock Is Considering Opening a Fast 'N Clean Car ...
Electrical Costs at One of Finfrock Corporation's Factories Are Listed ...