Refer to the data in Exercise 2-8. Data From Exercises 2-8: Stratton, Inc., has collected the following

Question:

Refer to the data in Exercise 2-8.

Data From Exercises 2-8:

Stratton, Inc., has collected the following information on its cost of electricity:


Required

a. Using the high-low method, compute the variable cost of electricity per machine hour.

b. Compute the total fixed cost of electricity.

c. Represent the electricity cost function in equation form.

d. What is the expected electricity cost when 750 machine hours are used?

e. Why does your answer to part (d) differ from the actual cost for the month of October, when 750  machine hours were used?

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Managerial Accounting

ISBN: 9781119577669

4th Edition

Authors: Charles E. Davis, Elizabeth Davis

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