(Appendix 5A) Hiss Corporation's activity for the last six months is as follows:

-Using the high-low method of analysis,the estimated variable cost per machine hour for electricity is closest to:
A) $0.40
B) $0.65
C) $0.70
D) $0.67

Question

(Appendix 5A) Hiss Corporation's activity for the last six months is as follows:
 
-Using the high-low method of analysis,the estimated variable cost per machine hour for electricity is closest to:
A) $0.40 
B) $0.65 
C) $0.70 
D) $0.67

Quizplus · Accepted Answer

11ea7761_188e_8d7a_81a5_255d2b98885b_TB2580_00 Variable cost = Change in cost ÷ Change in activity
Variable cost = $780 ÷ 1,200 machine-hours = $0.65 per machine-hour

(Appendix 5A) Hiss Corporation's Activity for the Last Six Months