The management of Fagundes Corporation would like to have a better understanding of the behavior of its inspection costs. The company has provided the following data:
Management believes that inspection cost is a mixed cost that depends on direct labor-hours.
Required:
Estimate the variable cost per direct labor-hour and the fixed cost per month using the high-low method. Show your work!

Question

The management of Fagundes Corporation would like to have a better understanding of the behavior of its inspection costs. The company has provided the following data:  
Management believes that inspection cost is a mixed cost that depends on direct labor-hours.
Required:
Estimate the variable cost per direct labor-hour and the fixed cost per month using the high-low method. Show your work!

Quizplus · Accepted Answer

The Answer of The management of Fagundes Corporation would like to have a better understanding of the behavior of its inspection costs. The company has provided the following data:  
Management believes that inspection cost is a mixed cost that depends on direct labor-hours.
Required:
Estimate the variable cost per direct labor-hour and the fixed cost per month using the high-low method. Show your work!

The Management of Fagundes Corporation Would Like to Have a Better