What is the variable electricity cost per unit and the total fixed electricity cost? At Dixon Manufacturing, electricity costs are a mixed cost. At 1,000 machinehours, electricity costs are $2,400. At 2,500 machine hours, electricity costsare $4,600. Using the high-low method, what is the variable electricity costper unit and the total fixed electricity cost?a. $1.47 and $930b. $1.47 and $1,200c. $1.84 and $560d. $1.84 and $920

Step 1: Definition of the High-Low MethodThe High-Low Method is a technique used to separate mixed…

Answered: At Dixon Manufacturing, electricity…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section14.A: Breakeven Analysis

Problem 7P

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Given the following cost and activity observations for Leno Enterprises'utilities, use the high-low method to calculate Leno's variable utilities cost permachine hour. Cost Machine HoursSeptember £4,100 22,000October £3,700 18,000November £3,900 19,000December £4,500 28,000a) £0.08b) £4.86c) £0.25d) £12.50
At Delta Co. Electricity cost starts with a minimum fixed cost.
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Using the high-low method, the variable rate is calculated to be $3.00 per machine hour: (S27,950 – $25,160)/(5,430 - 4,500) = $3.00. Using the high-low method, the fixed cost of electricity is calculated to be $11,660: $27,950 - (S3.00 × 5,430) = %3D S11,660. Using this information, construct a Cost Equation for electricity. Explain each element of the equation. Using this equation, estimate the total electricity cost for December, given that the estimated number of machine hours in December will be 5,300. 9. Pate Company is evaluating a project requiring an initial capital expenditure of $806,250. The project has an estimated life of 4 years and no salvage value. The yearly estimated net income and net cash flow from the project is as follows Year Net Cash Flow/Income 0. (806,250) 575,00 502,000 3 409,500 350,500 The company's minimum desired rate of return (cost of capital) is 12% REQUIRED: Calculate the following: (A) Payback Period; (B) Accounting Rate of Return; (C) Present Value…
You have calculated, using the high-low method, a variable cost per machine hour of $0.80 for your production power costs. Power costs at 6,000 machine hours are $5,400; at 9,000 machine hours, they are $7,800. What are the total fixed costs that you would use to estimate production power costs for your company at any level within your relevant range? a. $600 b. $6,400 c. $2,400 d. $4,800
Given the following costs and activities for Alpha Manufacturing, use the high-low method to calculate Alpha's variable electrical costs per machine hour. • March: Cost = $9,800, Machine Hours = 12,500 . = April: Cost $11,200, Machine Hours = 15,400 = May: Cost $10,500, Machine Hours = 13,900
Max Machining incurs the following utilities costs at different levels of production: 0 units: 500 units: 1,000 units: How would utility costs be properly classified? Select one: A. Stepped B. Fixed C. Mixed D. Curvilinear E. Variable $120 $2,620 $5,120
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Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to calculate Bounty' variable utilities costs per machine hour. Round your answer to the nearest cent. Cost Machine Hours March $3,070 15,158 April 2,688 10,482 May 2,870 12,037 June 3,847 17,906 Oa. $1.09 Ob. $1.56 Oc. $0.16 Od. $1.05
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Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to determine Bounty's variable utilities cost per machine hour. Round your answer to the nearest cent. Cost Machine Hours March $3,031 14,997 April 2,698 10,326 May 2,858 12,140 June 3,893 18,050 a.$0.15 b.$0.77 c.$1.55 d.$0.73

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