RR Company uses the high-low method to analyze cost behavior. The company observed that at 2,000 machine hours of activity, total maintenance costs averaged ₱40.00 per hour. When activity jumped to 6,000 machine hours, the average cost per machine hour totaled ₱35.00. If the number of machine hours would exceed 5,000, fixed cost would increase by ₱20,000. On the other hand, if it will be below 1,000 machine hours, fixed cost would decrease by ₱10,000. But, regardless of the number of machine hours, variable cost per unit remains constant. 1. If RR plans to incur 4,500 machine hours, the total cost would be _______. 2. If RR plans to incur 5,300 machine hours, the total cost would be _______.
RR Company uses the high-low method to analyze cost behavior. The company observed that at 2,000 machine hours of activity, total maintenance costs averaged ₱40.00 per hour. When activity jumped to 6,000 machine hours, the average cost per machine hour totaled ₱35.00. If the number of machine hours would exceed 5,000, fixed cost would increase by ₱20,000. On the other hand, if it will be below 1,000 machine hours, fixed cost would decrease by ₱10,000. But, regardless of the number of machine hours, variable cost per unit remains constant.
1. If RR plans to incur 4,500 machine hours, the total cost would be _______.
2. If RR plans to incur 5,300 machine hours, the total cost would be _______.
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