Question
Herbart Company gathered the following information on power costs and factory machine usage for the last 6 months. Power Cost January $24,400 February 30,300 March
Herbart Company gathered the following information on power costs and factory machine usage for the last 6 months.
Power Cost
January $24,400
February 30,300
March 29,000
April 22,340
May 19,900
June 14, 900
Factory Machine Hours
January 13,900
February 17,600
March 16,800
April 13,200
May 11,600
June 6,600
Using the high low method of analyzing costs, answer the following questions and show computations to support your answers
Part a: What is the estimated variable portion of power costs per factory machine hour?
Part b: What is the estimated fixed power cost each month?
Part c: If it is estimated that 10,000 factory machine hours will be run in July, what is the expected total power cost for July? (Points 30)
(TCO 9) Herbart Company gathered the following information on power costs and factory machine usage for the last 6 months. Power Cost January Factory Machine Hours $24,400 13,900 February 30,300 17,600 March 29,000 16,800 April 22,340 13,200 May 19,900 11,600 June 14,900 6,600 Using the high-low method of analyzing costs, answer the following questions and show computations to support your answers. Part (a): What is the estimated variable portion of power costs per factory machine hour? Part (b): What is the estimated fixed power cost each month? Part (c): If it is estimated that 10,000 factory machine hours will be run in July, what is the expected total power cost for July? (Points : 30)Step by Step Solution
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