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At the high level of activity in November, 7,000 machine hours were run and power costs were $2,000. In April, a month of low activity, 2,000 machine hours were run and power costs amounted to $6,000. Using the high-low method, what is the estimated fixed cost element of power costs? a. $12,000 b. $6,000 c. $3,600 d. $8,400

At the high level of activity in November, 7,000 machine hours were run and power costs were $2,000. In April, a month of low activity, 2,000 machine hours were run and power costs amounted to $6,000. Using the high-low method, what is the estimated fixed cost element of power costs? a. $12,000 b. $6,000 c. $3,600 d. $8,400

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 11MC: Total costs for ABC Distributing are $250,000 when the activity level is 10,000 units. If variable...
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At the high level of activity in November, 7,000 machine hours were run and power costs were $2,000. In April, a month of low activity, 2,000 machine hours were run and power costs amounted to $6,000. Using the high-low method, what is the estimated fixed cost element of power costs? a. $12,000 b. $6,000 c. $3,600 d. $8,400
Transcribed Image Text:At the high level of activity in November, 7,000 machine hours were run and power costs were $2,000. In April, a month of low activity, 2,000 machine hours were run and power costs amounted to $6,000. Using the high-low method, what is the estimated fixed cost element of power costs? a. $12,000 b. $6,000 c. $3,600 d. $8,400
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