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High-Low Method The highest and lowest levels of activity for the Felton Company were 58,000 direct labor hours and 42,000 direct labor hours, respectively. Maintenance costs were $420,000 at the 58,000-hour level and $380,000 at the 42,000-hour level.  Compute the maintenance cost formula.  Total cost = $Answer 1    + ($Answer 2    x direct labor hours)   What cost might we expect at an operating level of 52,000 direct labor hours? $Answer 3

High-Low Method The highest and lowest levels of activity for the Felton Company were 58,000 direct labor hours and 42,000 direct labor hours, respectively. Maintenance costs were $420,000 at the 58,000-hour level and $380,000 at the 42,000-hour level.  Compute the maintenance cost formula.  Total cost = $Answer 1    + ($Answer 2    x direct labor hours)   What cost might we expect at an operating level of 52,000 direct labor hours? $Answer 3

FINANCIAL ACCOUNTING
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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High-Low Method

The highest and lowest levels of activity for the Felton Company were 58,000 direct labor hours and 42,000 direct labor hours, respectively. Maintenance costs were $420,000 at the 58,000-hour level and $380,000 at the 42,000-hour level. 

Compute the maintenance cost formula. 

Total cost = $Answer 1

 

 + ($Answer 2

 

 x direct labor hours)

 

What cost might we expect at an operating level of 52,000 direct labor hours?

$Answer 3

 

 

 

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