The following data pertains to activity and the cost of electricity for two recent months: The best estimate of the total monthly fixed electrical cost is:
A)$300
B)$1,200
C)$1,500
D)$1,050

Question

The following data pertains to activity and the cost of electricity for two recent months:  The best estimate of the total monthly fixed electrical cost is:
A)$300 
B)$1,200 
C)$1,500 
D)$1,050

Quizplus · Accepted Answer

To calculate the variable manufacturing cost per unit:
 11eaaee8_679d_5064_933a_8122b13a10c5_TB5186_00 Variable manufacturing overhead cost = Change in cost F1F1F1S1F1F1F10 Change in activity
= ($1,800 - $1,500) F1F1F1S1F1F1F10 (5,000 - 4,000) = $0.30
Fixed cost element of manufacturing overhead = Total cost - Variable cost element
= $1,800 - ($0.30 F1F1F1S1F1F1F10 5,000) = $300

The Following Data Pertains to Activity and the Cost of Electricity