The following information is available for a company's utility cost for operating its machines over the last four months. MonthMachine hours Utility costJanuary1,100 $6,650February2,000 $7,300March2,800 $10,100April800 $4,500 Using the high-low method, the estimated total fixed cost for utilities is: The following information is available for a company's utility cost for operating its machines over the last four months.Machine hoursUtility cost$ 6,650$ 7,300$10,100$ 4,500MonthJanuary1,100February2,000March2,800April800Using the high-low method, the estimated total fixed cost for utilities is: Multiple Choice$4,500.$6,200.$2,260.$3,900.$1,700.

Name: The following information is available for a company's utility cost fo
Uploaded: 2022-12-02T03:59:28.000Z
Channel: Bartleby
Description: The following information is available for a company's utility cost for operating its machines over the last four months. MonthMachine hours Utility costJanuary1,100 $6,650February2,000 $7,300March2,800 $10,100April800 $4,500 Using the high-low metho

Calculation of Total fixed cost Using high-low method Fixed cost = Highest Activity Utility cost – (Variable cost per unit X Highest Activity number of Machine hour) = $ 10,100 – ($ 2.8 X 2,800 machine hours) = $ 10,100 – $ 7,840 = $ 2,260 Therefore, total fixed cost is $ 2,260Calculation of Variable cost per unit using High-low method Variable cost per unit = (Highest Activity Utility Cost – Lowest Activity Utility Cost)/ (Highest Activity number of Machine hours – Lowest Activity number of Machine hours) = ($ 10,100 – $ 4,500)/ (2,800 machine hours – 800 machine hours) = $ 5,600/ 2,000 machine hours = $ 2.8 per machine hour Therefore, variable cost is $ 2.8 per machine hour