In June, Arbortech Corp. used 60,000 machine hours and incurred a total electricity cost of $92,000. In December, when the plant operated at its lowest capacity of 35,000 machine hours, the electricity cost was $73,500. Calculate the variable cost per machine hour using the High-Low method.

In June, Arbortech Corp. used 60,000 machine hours and incurred a total electricity cost of $92,000. In December, when the plant operated at its lowest capacity of 35,000 machine hours, the electricity cost was $73,500. Calculate the variable cost per machine hour using the High-Low method.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 10E: SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that...

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I need guidance with this general accounting problem using the right accounting principles.

In June, Arbortech Corp. used 60,000 machine hours and incurred
a total electricity cost of $92,000. In December, when the plant
operated at its lowest capacity of 35,000 machine hours, the
electricity cost was $73,500.
Calculate the variable cost per machine hour using the High-Low
method.

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