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Tran Company, which uses the high-low method to analyze cost behavior, has determined that machine hours best predict the company's total utilities cost. The company's
Tran Company, which uses the high-low method to analyze cost behavior, has determined that machine hours best predict the company's total utilities cost. The company's cost and machine hour usage data for the first six months of the year follow: E: (Click the icon to view the data.) Read the requirements. IOL Requirement 1. What is the variable utilities cost per machine hour? Let's begin by determining the formula that is used to calculate the variable cost (slope). = Variable cost (slope) (Round the variable cost to the nearest cent.) Using the high-low method, the variable utilities cost per machine hour is Requirement 2. What is the fixed cost of utilities each month? Let's begin by determining the formula that is used to calculate the fixed cost component. Fixed cost Using the high-low method, the fixed cost of utilities each month is Requirement 3. If Tran Company uses 1,250 machine hours in a month, what will its total costs be? (Round the variable cost per unit to two decimal places and round your total costs calculation to the nearest whole dollar.) The total costs when 1,250 machine hours are used is Machine Hours 1,090 1,180 Month Total Cost January $ 3,430 February ..... $ 3,780 March. ....... $ 3,500 April......... $ $ 3,730 May ........ $ 4,700 June $ 4,200 $ 1,000 1,240 1,380 1,400
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