Given the following cost and activity observations for Morrison Manufacturing's electricity expenses, use the high-low method to calculate Morrison's fixed costs per month. Month Total Cost Machine Hours July August $34,720 $42,380 850 1,150 September $48,560 1,340 Using the high-low method, determine the variable cost per machine hour and the total fixed costs. Select the correct answer: a. $28.24 per machine hour and $10,716 respectively. b. $28.24 per machine hour and $30,800 respectively. c. $36.25 per machine hour and $10,716 respectively. d. $36.25 per machine hour and $30,800 respectively.

Given the following cost and activity observations for Morrison Manufacturing's electricity expenses, use the high-low method to calculate Morrison's fixed costs per month. Month Total Cost Machine Hours July August $34,720 $42,380 850 1,150 September $48,560 1,340 Using the high-low method, determine the variable cost per machine hour and the total fixed costs. Select the correct answer: a. $28.24 per machine hour and $10,716 respectively. b. $28.24 per machine hour and $30,800 respectively. c. $36.25 per machine hour and $10,716 respectively. d. $36.25 per machine hour and $30,800 respectively.

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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