Figure 3-11.The following four months of data were collected on utility cost and the number of labor hours in a factory.
-Refer to Figure 3-11. Using the high-low method, compute the fixed cost of electricity.
A) $13,740
B) $10,860
C) $6,400
D) None of these are correct.

Question

Figure 3-11.The following four months of data were collected on utility cost and the number of labor hours in a factory. 
-Refer to Figure 3-11. Using the high-low method, compute the fixed cost of electricity.
A) $13,740 
B) $10,860 
C) $6,400 
D) None of these are correct.

Quizplus · Accepted Answer

The fixed cost of electricity is $13,740. This is the cost that does not change with the level of activity.