Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Mattey Publishing Company (Mattey) is a publisher of novels. The monthly equipment maintenance cost for Mattey is considered to be a mixed cost. The variable
Mattey Publishing Company (Mattey) is a publisher of novels. The monthly equipment maintenance cost for Mattey is considered to be a mixed cost. The variable portion of the cost is related to the number of novels published. The production volume and maintenance costs for the past six months are presented below. Mattey uses the high-low method to separate mixed costs into its fixed and variable portions.
Month | Volume of Production (Number of Novels) | Equipment Maintenance Costs |
May | 361,000 | $3,900 |
June | 561,000 | $6,600 |
July | 264,000 | $4,900 |
August | 100,000 | $2,100 |
September | 521,000 | $8,100 |
October | 248,000 | $4,700 |
Do not enter dollar signs or commas in the input boxes.
a) Calculate the variable rate for the equipment maintenance cost. Round your answer to 5 decimal places. Variable Cost per Unit: $ b) Calculate the fixed portion of the equipment maintenance cost. Round your answer to the nearest whole number. Fixed Cost: $ c) Assume that 420,000 novels is the budgeted production level for October. Using the results of the high-low method in parts a) and b), what is the expected total equipment maintenance cost for October? Round your answer to 2 decimal places. Expected total equipment maintenance cost for October: $Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started