Answer the following questions using the information below:
The Tamworth Company uses the high-low method to estimate the cost function.The information for 2018 is provided below:
$$\begin{array} { l c c }
& \text { Machine-hours } & \text { Labour Costs } \
\text { Highest observation of cost driver } & 800 & \$ 20000 \
\text { Lowest observation of cost driver } & 480 & \$ 13600
\end{array}$$
-What is the slope coefficient per machine-hour?
A)$28.33
B)$25.00
C)$20.00
D)$0.05

Question

Answer the following questions using the information below:
The Tamworth Company uses the high-low method to estimate the cost function.The information for 2018 is provided below:
 $$\begin{array} { l c c } 
& \text { Machine-hours } & \text { Labour Costs } \
\text { Highest observation of cost driver } & 800 & \$ 20000 \
\text { Lowest observation of cost driver } & 480 & \$ 13600
\end{array}$$
-What is the slope coefficient per machine-hour?
A)$28.33
B)$25.00
C)$20.00
D)$0.05

Quizplus · Accepted Answer

The slope coefficient per machine-hour is calculated as the change in cost divided by the change in machine-hours. Here, it is $(\$20000 - \$13600) / (800 - 480) = \$6400 / 320 = \$20.00$.

Answer the Following Questions Using the Information Below: the Tamworth

Answer the Following Questions Using the Information Below:
the Tamworth