Question
. Paine Company wishes to determine the fixed portion of its electrical costs (a mixed cost). Management believes that the variable portion of the electrical
. Paine Company wishes to determine the fixed portion of its electrical costs (a mixed cost). Management believes that the variable portion of the electrical costs is driven by machine-hours. Information for the previous three months follows:
Machine-hours Electrical cost
January 66,000 $7,150
February 62,000 $7,000
March 68,000 $7,600
Company is expecting 64,200 machine hours for month of April. What is expected company's electrical cost for April? (Hint: Using the high-low method, first determine the relationship between electrical cost and machine hours. Then using the relationship compute expected company's electrical costs for month of April.)
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