Using the high-low method and the information below, compute the monthly total fixed costs for SKP Corporation. $\begin{array}{|l|c|r|}
\hline \text { Month } & \begin{array}{c}
\text { Telephone } \
\text { Hours Used }
\end{array} & \begin{array}{c}
\text { Telephone } \
\text { Expenses }
\end{array} \
\hline \text { April } & 100 & \$ 4,500 \
\text { May } & 110 & 4,800 \
\text { June } & 150 & 5,400 \
\hline
\end{array}$
A) $1,800
B) $2,700
C) $3,640
D) $4,500

Question

Quizplus · Accepted Answer

The high-low method calculates variable cost per unit first: (5400 - 4500) / (150 - 100) = $18 per hour. Then, using the highest or lowest point, calculate fixed costs: $5400 - (150 * $18) = $2,700.

Using the High-Low Method and the Information Below, Compute the Monthly