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High-Low Method, Cost Formulas The controller of the South Charleston plant of Ravinia, Inc., monitored activities associated with materials handling costs. The high and
High-Low Method, Cost Formulas The controller of the South Charleston plant of Ravinia, Inc., monitored activities associated with materials handling costs. The high and low levels of resource usage occurred in September and March for three different resources associated with materials handling. The number of moves is the driver. The total costs of the three resources and the activity output, as measured by moves for the two different levels, are presented as follows: Resource Forklift depreciation: Number of Moves Total Cost Low 5,000 $2,400 High 20,000 2,400 Indirect labor: Low 5,000 $64,000 High 20,000 148,000 Fuel and oil for forklift Low High 5,000 20,000 $3,450 13,800 Required: If required, round your answers to two decimal places. Enter a "0" if required. 1. Determine the cost behavior formula of each resource. Use the high-low method to assess the fixed and variable components Forklift depreciation: V F 2,400 2,400
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