MANAGEMENT ACCOUNTING

Question 4 [10 marks] The following six months of data were collected on electricity cost and the number of machine hours in a factory. Month June July August September October November Electricity cost R25,160 26,170 27,250 26,680 27,950 27,500 Machine hours 4,500 4,810 5,120 5,010 5,430 5,190 Required: 1. Using the high-low method compute the variable rate for the electricity cost. (4 marks) 2. Using the high-low method compute the fixed cost of electricity. (3 marks) 3. Estimate the total electricity cost to be incurred in December if 5,300 machine hours are incurred