Berry Enterprises, which uses the high-low method to analyze cost behavior, has determined that machine hours best explain the company's utilities cost. The company's relevant range of activity varies from a low of 400 machine hours to a high of 1,000 machine hours, with the following data being available for the first six months of the year: Month January February March April May June Utilities $6,000 $5,580 $6,720 $6,480 $6,660 $5,520 Machine Hour 500 430 620 580 610 420 1. Using the high-low method, find the variable utilities cost per machine hour for Berry. 2. Using the high-low method, find the fixed utilities cost per month for Berry. 3. Using the high-low method, find the utilities cost for Berry associated with 830 machine hours.
Berry Enterprises, which uses the high-low method to analyze cost behavior, has determined that machine hours best explain the company's utilities cost. The company's relevant range of activity varies from a low of 400 machine hours to a high of 1,000 machine hours, with the following data being available for the first six months of the year: Month January February March April May June Utilities $6,000 $5,580 $6,720 $6,480 $6,660 $5,520 Machine Hour 500 430 620 580 610 420 1. Using the high-low method, find the variable utilities cost per machine hour for Berry. 2. Using the high-low method, find the fixed utilities cost per month for Berry. 3. Using the high-low method, find the utilities cost for Berry associated with 830 machine hours.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Berry Enterprises, which uses the high-low method to analyze cost
behavior, has determined that machine hours best explain the
company's utilities cost. The company's relevant range of activity
varies from a low of 400 machine hours to a high of 1,000 machine
hours, with the following data being available for the first six
months of the year:
Month
January
February
March
April
May
June
Utilities
$6,000
$5,580
$6,720
$6,480
$6,660
$5,520
Machine Hour
500
430
620
580
610
420
1. Using the high-low method, find the variable utilities cost per
machine hour for Berry.
2. Using the high-low method, find the fixed utilities cost per month
for Berry.
3. Using the high-low method, find the utilities cost for Berry
associated with 830 machine hours.
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