Question 4

Utility costs at one UISZ Power Corporation's factories are listed below:

	Machines hours	Utility cost $
Feb	4221	39,308
match	4268	39,573
April	4234	39,392
may	4237	39,394
June	4299	39,787
July	4318	39,881
Aug	4305	39,798
Sep	4308	39,831
Oct	4226	39,315

Management believes that utility cost is a mixed cost that depends on machine hours

Required:

a) Estimate the variable cost per machine-hour. Show your work.

b) Using the high-low method to calculate the fixed cost per month.

c) If the company uses 4800 machine hours in November, how much will the total utility bill be? (Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar. State two disadvantages of high-low method (Word limit: 100 words,

d) Define total and unit fixed and variable cost. Explain why the distinction between the two types of costs is important. (Word limit: 100 words,