Pearson Electric Company uses the high-low method to analyze mixed costs.The following information relates to the production data for the first six months of the year.
How should the cost function be properly stated?
A)Y = $6,025 + $2.00H.
B)Y = $6,520 + $3.00H.
C)Y = $6,085 + $2.00H.
D)Y = $6,250 + $3.00H. Unit variable cost = ($9,460 - $7,300)/(980 - 260)= $3.00.Fixed cost = $9,460 - (980 x $3.00)= $6,520 or $7,300 - (260 x $3.00)= $6,520

Question

Pearson Electric Company uses the high-low method to analyze mixed costs.The following information relates to the production data for the first six months of the year. 
How should the cost function be properly stated?
A)Y = $6,025 + $2.00H. 
B)Y = $6,520 + $3.00H. 
C)Y = $6,085 + $2.00H. 
D)Y = $6,250 + $3.00H. Unit variable cost = ($9,460 - $7,300)/(980 - 260)= $3.00.Fixed cost = $9,460 - (980 x $3.00)= $6,520 or $7,300 - (260 x $3.00)= $6,520

Quizplus · Accepted Answer

The Answer of Pearson Electric Company uses the high-low method to analyze mixed costs.The following information relates to the production data for the first six months of the year. 
How should the cost function be properly stated?
A)Y = $6,025 + $2.00H. 
B)Y = $6,520 + $3.00H. 
C)Y = $6,085 + $2.00H. 
D)Y = $6,250 + $3.00H. Unit variable cost = ($9,460 - $7,300)/(980 - 260)= $3.00.Fixed cost = $9,460 - (980 x $3.00)= $6,520 or $7,300 - (260 x $3.00)= $6,520

Pearson Electric Company Uses the High-Low Method to Analyze Mixed