Question 12

The following six months of data were collected on maintenance cost and the number of machine hours in a factory:

MONTH	MAINTENANCE COST	MACHINE HOURS
July	$16,900	5,600
August	13,900	4,500
September	10,900	3,800
October	11,500	3,600
November	13,000	4,200
December	17,900	4,500

Select the correct set of High and Low months from the following combinations in order to use the High-Low method to separate mix costs:

High Low

1. July October
2. July September
3. December September
4. December October

YOUR ANSWER:

Refer to the data in question 12 above. What will be the monthly fixed maintenance cost for the factory?

1. $1520
2. $1680
3. $1780
4. $1880

YOUR ANSWER

Question 13

Refer to the information in question 12 above. Using High-Low method what would be the variable rate per Machine Hour for the factory?

1. $3.00
2. $2.70
3. $3.50
4. $4.50

YOUR ANSWER