Greenfield Manufacturing Inc. has electricity costs that consist of a fixed component and a variable component based on machine hours. The following data is available: Machine Hours Cost 45,000 55,000 $105,000 $118,000 Calculate the fixed cost and the variable cost per machine hour.

Greenfield Manufacturing Inc. has electricity costs that consist of a fixed component and a variable component based on machine hours. The following data is available: Machine Hours Cost 45,000 55,000 $105,000 $118,000 Calculate the fixed cost and the variable cost per machine hour.

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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Question

Please explain the solution to this general accounting problem with accurate principles.

Greenfield Manufacturing Inc. has electricity costs that
consist of a fixed component and a variable component
based on machine hours. The following data is available:
Machine Hours Cost
45,000
55,000
$105,000
$118,000
Calculate the fixed cost and the variable cost per machine
hour.

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