At the high level of activity in November, 7,000 machine hours were run and power costs were $18,000. In April, a month of low activity, 2,000 machine hours were run and power costs amounted to $9,000. Using the high-low method, the estimated fixed cost element of power costs is; A. $18,000 B. $9,000 C. $5,400 D. $12,600

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 2EB: Boarders estimates overhead will utilize 160,000 machine hours and cost $80,000. It takes 4 machine...
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At the high level of activity in November, 7,000 machine hours were run and power costs
were $18,000. In April, a month of low activity, 2,000 machine hours were run and power
costs amounted to $9,000.
Using the high-low method, the estimated fixed cost element of power costs is;
A. $18,000
B. $9,000
C. $5,400
D. $12,600
Transcribed Image Text:At the high level of activity in November, 7,000 machine hours were run and power costs were $18,000. In April, a month of low activity, 2,000 machine hours were run and power costs amounted to $9,000. Using the high-low method, the estimated fixed cost element of power costs is; A. $18,000 B. $9,000 C. $5,400 D. $12,600
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