Based on the following information, calculate fixed costs per month using the high-low method. ? $$\begin{array} { l c c }
& \text { Cost } & \text { Machine Hours } \
\text { May } & \$ 56,000 & 22,000 \
\text { June } & 76,000 & 32,000 \
\text { July } & 58,000 & 26,000 \
\text { August } & 66,000 & 24,000
\end{array}$$
A) $12,000
B) $11,000
C) $10,000
D) $9,000

Question

Based on the following information, calculate fixed costs per month using the high-low method. ? $$\begin{array} { l c c } 
& \text { Cost } & \text { Machine Hours } \
\text { May } & \$ 56,000 & 22,000 \
\text { June } & 76,000 & 32,000 \
\text { July } & 58,000 & 26,000 \
\text { August } & 66,000 & 24,000
\end{array}$$
A) $12,000
B) $11,000
C) $10,000
D) $9,000

Quizplus · Accepted Answer

Fixed costs per month = $12,000Explanation:Variable cost per machine hour = ($76,000 - $56,000) / (32,000 - 22,000) = $1 per machine hourFixed costs = $56,000 - (22,000 * $1) = $12,000

Based on the Following Information, Calculate Fixed Costs Per Month