Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Patter Inc. believes their electricity costs are affected by the number of machine-hours worked. Machine hours and electricity costs for 2020 were as follows: Month

Patter Inc. believes their electricity costs are affected by the number of machine-hours worked. Machine hours and electricity costs for 2020 were as follows:

Month

Machine Hours

Electricity Costs

January

300

$ 6,000

February

240

4,250

March

580

7,750

April

860

9,750

May

1040

11,250

June

940

11,000

July

1140

14,000

August

900

12,250

September

1240

14,250

October

740

7,750

November

480

7,000

December

380

6,500

REQUIRED:

  1. Using the high-low method, develop an estimate of variable electricity costs per machine hour.
  2. Using the high-low method, develop an estimate of fixed electricity costs per month.
  3. Using the high-low method, develop a cost formula for monthly electricity costs.
  4. Estimate electricity costs for a month in which 500 machine hours are worked.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Basics

Authors: 3G E-Learning

1st Edition

1984624261, 978-1984624260

More Books

Students also viewed these Accounting questions