Question
Sunland, Inc., has collected the following information on its cost of electricity: Machine Hours Total Electricity Costs January 500 $200 February 540 $280 March 340
Sunland, Inc., has collected the following information on its cost of electricity:
Machine Hours | Total Electricity Costs | ||||
January | 500 | $200 | |||
February | 540 | $280 | |||
March | 340 | $200 | |||
April | 470 | $210 | |||
May | 670 | $280 | |||
June | 730 | $340 | |||
July | 330 | $180 | |||
August | 530 | $260 | |||
September | 250 | $146 | |||
October | 750 | $340 | |||
November | 850 | $350 | |||
December | 600 | $330 |
(a)
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Your answer is correct.
Identify the high and low points.
Machine Hours | $ | |||
High point | enter the machine hours for high point | $enter the high point in dollars | ||
Low point | enter the machine hours for low point | $enter the low point in dollars |
Using the high-low method, compute the variable cost of electricity per machine hour. (Round unit cost to 2 decimal places, e.g. 52.75.)
Variable cost | $enter the variable cost per machine hour in dollars per machine hour |
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(b)
Compute the total fixed cost of electricity. (Round answer to 2 decimal places, e.g. 52.75.)
Fixed cost | $enter the fixed cost amount in dollars |
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(c)
Represent the electricity cost function in equation form. (Round answers to 2 decimal places, e.g. 52.75.)
Total cost = $enter a dollar amount MH + $enter a dollar amount |
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(d)
What is the expected electricity cost when 750 machine hours are used? (Round answer to 2 decimal places, e.g. 52.75.)
Total cost | $enter the total cost amount in dollars |
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