19. (8 points) Ebele Company incurred the following: Month January February March Utilities Expense $50,400 36,480...
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19. (8 points) Ebele Company incurred the following: Month January February March Utilities Expense $50,400 36,480 43,200 33,310 # of Kilowatt Hours 620 420 520 390 LTT 52,210 650 April May June July 35,500 400 36,550 430 August 53,650 690 September 51,100 640 a. Using the high-low method to analyze mixed costs and the data above, provide the cost equation that can be used to estimate Utilities Expense. the highest and to west Point are months I and 4. Respectively Change in total utilities Geppose - $50400-33,310 $170% Chang in total Kilowatt hr = 620-390 = 230 Slope (b) = 17090 230 = 74.50 Consters (a= 50400-(74.30 x 620) = 4334 Utilities Garms = 4334 +(74.30xK) (k: Kilowat hars) b. Ebele estimates 475 kilowatt hours will be used in the next period. What is the estimate of Utilities Expense at 475 kilowatt hours? Y=4334 +(74.30x475) 4-39626.50 the estimate of utilities Expense at 45 Kilowat hans 1539,626.50 c. Although the high-low method is not the most accurate method to estimate costs, this method is often used for cost estimation. Why is the high-low method often used to estimate costs? 19. (8 points) Ebele Company incurred the following: Month January February March Utilities Expense $50,400 36,480 43,200 33,310 # of Kilowatt Hours 620 420 520 390 LTT 52,210 650 April May June July 35,500 400 36,550 430 August 53,650 690 September 51,100 640 a. Using the high-low method to analyze mixed costs and the data above, provide the cost equation that can be used to estimate Utilities Expense. the highest and to west Point are months I and 4. Respectively Change in total utilities Geppose - $50400-33,310 $170% Chang in total Kilowatt hr = 620-390 = 230 Slope (b) = 17090 230 = 74.50 Consters (a= 50400-(74.30 x 620) = 4334 Utilities Garms = 4334 +(74.30xK) (k: Kilowat hars) b. Ebele estimates 475 kilowatt hours will be used in the next period. What is the estimate of Utilities Expense at 475 kilowatt hours? Y=4334 +(74.30x475) 4-39626.50 the estimate of utilities Expense at 45 Kilowat hans 1539,626.50 c. Although the high-low method is not the most accurate method to estimate costs, this method is often used for cost estimation. Why is the high-low method often used to estimate costs?
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