Use the following information to answer the next question(s).
The following information was collected regarding maintenance costs at different activity levels measured in machine hours:

-Using the cost formula developed under the high-low method, what would be the estimate of maintenance costs if 13,000 machine hours are scheduled for next month
A) $650,000.
B) $950,000.
C) $850,000.
D) $882,000.

Question

Use the following information to answer the next question(s).
The following information was collected regarding maintenance costs at different activity levels measured in machine hours:
 
-Using the cost formula developed under the high-low method, what would be the estimate of maintenance costs if 13,000 machine hours are scheduled for next month
A) $650,000. 
B) $950,000. 
C) $850,000. 
D) $882,000.

Quizplus · Accepted Answer

The high-low method calculates variable cost per unit and fixed costs using the highest and lowest activity levels. Using these, the total cost for 13,000 machine hours can be estimated.

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