Jorgenson Corporation has provided the following data for the first five months of the year: Using the high-low method of analysis, the estimated variable lubrication cost per machine hour is closest to:
A) $1.50
B) $1.25
C) $0.67
D) $1.40

Question

Jorgenson Corporation has provided the following data for the first five months of the year:  Using the high-low method of analysis, the estimated variable lubrication cost per machine hour is closest to:
A) $1.50 
B) $1.25 
C) $0.67 
D) $1.40

Quizplus · Accepted Answer

11eacbfc_c8b2_595b_8ffe_f534d555bf6d_TB7552_00 Variable cost = Change in cost ÷ Change in activity = $240 ÷ 160 machine hours = $1.50 per machine hour

Jorgenson Corporation Has Provided the Following Data for the First