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Star Inc uses the high-low method to analyze cost behavior. The company observed that at 22,000 machine hours of activity, total maintenance costs averaged P8.00
Star Inc uses the high-low method to analyze cost behavior. The company observed that at 22,000 machine hours of activity, total maintenance costs averaged P8.00 per hour. When activity jumped to 30,000 machine hours, which was still within the relevant range, the average cost per machine hour totaled P7. On the basis of this information, the total fixed cost was:
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P12,760
P11,000
P82,500
P90,000
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