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Bates Company, which uses the high-low method to analyze cost behavior, has determined that machine hours best predict the company's total utilities cost. The company's
Bates Company, which uses the high-low method to analyze cost behavior, has determined that machine hours best predict the company's total utilities cost. The company's cost and machine hour usage data for the first six months of the year follow: (Click the icon to view the data.) Requirements Using the high-low method, answer the following questions: 1. What is the variable utilities cost per machine hour? 2. What is the fixed cost of utilities each month? 3 If Bates Company uses 1,200 machine hours in a month, what will its total costs be? Data Table Month Total Cost Machine Hours Requirement 1. What is the variable utilities cost per machine hour? 3,420 1,080 Let's begin by determining the formula that is used to calculate the variable cost (slope). 1,160 Change in cost = Variable cost (slope) January ...... $ February $ March ....... $ April $ May $ 3,780 3,388 3,780 4,000 4,076 1.030 1,230 (Round the variable cost to the nearest cent.) 1,360 Using the high-low method, the variable utilities cost per machine hour is $ June $ 1,460 Requirement 2. What is the fixed cost of utilities each month? Let's begin by determining the formula that is used to calculate the fixed cost component. Print Done Fixed cost Using the high-low method, the fixed cost of utilities each month is $ Requirement 3. If Bates Company uses 1,200 machine hours in a month, what will its total costs be? (Round the variable cost per unit to two decimal places and round your total costs calculation to the nearest whole dollar.) The total costs when 1.200 machine hours are used is $ Choose from any list or enter any number in the input fields and then continue to the next
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