Northern Manufacturing Company accumulates the following data concerning a mixed cost, using machine hours as the activity level. Month Machine Hours Total Cost January 3,850 $12,740 February 4,320 $13,718 March 3,670 $12,284 April 4,590 $14,216 May 4,150 $13,452 Compute the variable cost per machine hour using the high-low method. High-Low Method: The high-low method is used to bifurcate the total costs into the variable costs and the fixed costs. The total cost at the highest activity level and the total cost at the lowest activity level are considered to determine the variable cost per unit. The variable costs are then reduced from the total cost to determine the fixed cost.

Northern Manufacturing Company accumulates the following data concerning a mixed cost, using machine hours as the activity level. Month Machine Hours Total Cost January 3,850 $12,740 February 4,320 $13,718 March 3,670 $12,284 April 4,590 $14,216 May 4,150 $13,452 Compute the variable cost per machine hour using the high-low method. High-Low Method: The high-low method is used to bifurcate the total costs into the variable costs and the fixed costs. The total cost at the highest activity level and the total cost at the lowest activity level are considered to determine the variable cost per unit. The variable costs are then reduced from the total cost to determine the fixed cost.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 9P: Grand Canyon Manufacturing Inc. produces and sells a product with a price of 100 per unit. The...

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Benjamin Company accumulates the following data concerning a mixed cost, using miles as the activity level. Miles Driven Total Cost January 7,500 $20,000 February 8,200 $21,100 March 8,500 $22,000 April 8,300 $21,750 Compute the variable- and fixed-cost elements using the high-low method.Single line text.
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Compute the variable and fixed cost elements
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