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

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