Question
DubboLtd has accumulated the following data for the most recent 6-month period. Maintenance services have been determined to be a mixed cost. Month Direct labour
DubboLtd has accumulated the following data for the most recent 6-month period. Maintenance services have been determined to be a mixed cost.
Month
Direct labour hours
Maintenance services
July
30,000
$45,000
August
18,000
28,000
September
21,000
40,000
October
4,000
17,000
November
12,000
20,000
December
9,000
20,000
Management believes that maintenance cost is a mixed cost that depends on direct labour hours. Using the high-low method to estimate the variable component of this cost, the estimate would be closest to:
Select one:
a.$0.93 per direct labour hour
b.$1.10 per direct labour hour
c.$1.08 per direct labour hour
d.$0.95 per direct labour hour
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