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Barkoff Enterprises, which uses the high-low method to analyze cost behavior, has determined that machine hours best explain the company's utilities cost. The company's relevant
Barkoff Enterprises, which uses the high-low method to analyze cost behavior, has determined that machine hours best explain the company's utilities cost. The company's relevant range of activity varies from a low of 600 machine hours to a high of 1,200 machine hours, with the following data being available for the first six months of the year:
Month | Utilities | Machine Hours | |||||
January | $ | 10,000 | 930 | ||||
February | 9,660 | 850 | |||||
March | 10,250 | 940 | |||||
April | 10,660 | 1,050 | |||||
May | 10,856 | 1,080 | |||||
June | 10,450 | 1,030 | |||||
Using the high-low method, the utilities cost for Barkoff associated with 1,110 machine hours would be:
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