Question
Hot'lanta, Inc., 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
Hot'lanta, Inc., 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 1,100 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
The fixed utilities cost per month is:
$5,240.
$4,604.
an amount other than those listed above.
$5,600.
$5,940.
Using the high-low method, the utilities cost associated with 1,110 machine hours would be:
$11,012.
an amount other than those listed above.
$10,882.
$10,922.
$10,732.
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