At Long Co., electricity cost starts with a minimum fixed cost, and after that, there is a perfectly variable expense. Using estimated machine hours: Machine hours Cost 50,000 60,000 $98,000 $112,000 What is the a) estimated variable cost per machine hour and what is the b) estimated total fixed cost?

At Long Co., electricity cost starts with a minimum fixed cost, and after that, there is a perfectly variable expense. Using estimated machine hours: Machine hours Cost 50,000 60,000 $98,000 $112,000 What is the a) estimated variable cost per machine hour and what is the b) estimated total fixed cost?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 9DQ: Describe the cost formula for a strictly variable cost such as electrical power cost of 1.15 per...

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Describe the cost formula for a strictly variable cost such as electrical power cost of 1.15 per machine hour (i.e., every hour the machinery is run, electrical power cost goes up by 1.15).