Mark owns a machine shop. In reviewing the shops utility bills for the past 12 months, he

Question:

Mark owns a machine shop. In reviewing the shop’s utility bills for the past 12 months, he found that the highest bill of $2,400 occurred in August when the machines worked 1,000 machine hours. The lowest utility bill of $2,200 occurred in December when the machines worked 500 machine hours.

Requirements 1. Calculate the variable rate per machine hour and the total fixed utility cost.

2. Show the equation for determining the total utility cost for the machine shop.

3. If Mark anticipates using 700 machine hours in January, predict the shop’s total utility bill using the equation from Requirement 2.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Horngrens Accounting The Managerial Chapters

ISBN: 9781292105871

11th Global Edition

Authors: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura

Question Posted: