### High-Low Method to Determine Variable Utilities Cost per Machine HourGiven the following cost and activity observations for Bounty Company's utilities, use the high-low method to determine Bounty's variable utilities cost per machine hour. Round your answer to the nearest cent.| | Cost | Machine Hours ||---|------|---------------|| March | $3,142 | 15,489 || April | $2,691 | 10,041 || May | $2,810 | 11,509 || June | $3,881 | 18,009 |a. $0.15 b. $1.05 c. $1.64 d. $1.01 **Explanation of the High-Low Method:**The high-low method is used to estimate the variable and fixed cost components of a cost. It involves the following steps:1. Identify the highest and lowest activity levels and their corresponding total costs.2. Calculate the variable cost per unit of activity.3. Determine the total fixed cost.Here's how the calculations are done based on the provided data:1. **Identify Highest and Lowest Activity Levels:** - Highest: June (18,009 machine hours, $3,881) - Lowest: April (10,041 machine hours, $2,691)2. **Calculate the Variable Cost per Machine Hour:** - Variable cost per machine hour = (Cost at highest activity level - Cost at lowest activity level) / (Highest activity level - Lowest activity level) - Variable cost per machine hour = ($3,881 - $2,691) / (18,009 - 10,041) - Variable cost per machine hour = $1,190 / 7,968 - Variable cost per machine hour = $0.15 (rounded to the nearest cent)3. **Determine the Total Fixed Cost:** - Total fixed cost can be calculated using either the highest or lowest activity level, but this step is not required to answer the given question.Thus, the correct answer is:a. $0.15

Variable cost: These are those cost which changes with the changing level of activity i.e. higher…

Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to determine Bounty's variable utilities cost per machine hour. Round your answer to the nearest cent. Cost Machine Hours March $3,142 15,489 April 2,691 10,041 May 2,810 11,509 June 3,881 18,009 Oa. $0.15 Ob. $1.05 Oc. $1.64 Od. $1.01

Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to determine Bounty's variable utilities cost per machine hour. Round your answer to the nearest cent. Cost Machine Hours March $3,142 15,489 April 2,691 10,041 May 2,810 11,509 June 3,881 18,009 Oa. $0.15 Ob. $1.05 Oc. $1.64 Od. $1.01

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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TARGET SALES UNITS Determine the number of cakes a bakery must sell to gerate $1,100 in profit based on the following information: Price per cake $14.71 Variable Cost per cake Ingredients $2.25 Direct Labor $ 1.02 Overhead $.25 Fixed Cost Per Month $4,476
Electronio ExperGecupancy Percentage 62 Month January April August 6,200 6,600 68 7,200 78 December 5,500 50 Jsing the highllow two point method to: 1 Determine the variable cost per 1poercent of occupancy 2 Estimate the fixed costs per month 3 What is the estimated total electric expense at 62 pecent of ocoupancy? ANSWER Month Electronic Expenses Oooupanoy Percentage High August 7,200 78 Low December 5,500 50 Difference 1,700 28 1 Variable cost per 1% of ocoupanoy = 61 2 Total variable cost of electric expense for December = Total fixed cost of electric expense for December = 3,035.71 2,464.29 Total variable cost of electric expense for August = Total fixed cost of electrio expense for August = 4,735.71 2,464.29 3 Using the fixed cost for December as the total fixed cost for estimation Total variable cost of electric expense at 62%. oooupancy = Total fixed oost of electric expense at 62% occupanoy Estimated total electric expense at 62% occupancy =
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N1. Account
The following data pertain to activity and utilities costs for two recent years: Activity Level in Units Utilities Cost Multiple Choice 5075 per unit $1.50 per unit Using the high-low method, what is the variable cost per unit for utilities? $125 per unit Year 2 $133 per unit 12,000 $15,000 Year 1 8,000 $12,000
A. Manufacturing margin? b. Contribution margin? C. Operating income for PhiladelPho's company ?
e & Exit The following information is available for a company's utility cost for operating its machines over the last four months. Month Machine hours Utility cost January 1,040 $6,590 February 1,940 $7,180 March 2,680 $8,100 April 740 $4,650 Using the high-low method, the estimated variable cost per machine hour for utilities is: Multiple Choice O $6.28. $3.02. $1.78. $6.47. $4.14.