Sunland, Inc., has collected the following information on its cost of electricity: Machine Hours Total Electricity Costs January 500 $200 February 540 $290 March 360 $200 April 460 $210 May 650 $260 June 730 $330 July 310 $160 August 500 $270 September 220 $121 October 740 $340 November 840 $400 December 600 $310 Represent the electricity cost function in equation form. (Round answers to 2 decimal places, e.g. 52.75.)Total cost = $enter a dollar amount × MH + $enter a dollar amount Represent the electricity cost function in equation form. (Round answers to 2 decimal places, e.g. 52.75.)Total cost = $x MH + $

Variable cost per hour = (Highest activity cost - Lowest activity cost) / (Highest activity hours -…

Answered: Sunland, Inc., has collected the…

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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Sunland, Inc., has collected the following information on its cost of electricity:

	Machine Hours	Total Electricity Costs
January	500	$200
February	540	$290
March	360	$200
April	460	$210
May	650	$260
June	730	$330
July	310	$160
August	500	$270
September	220	$121
October	740	$340
November	840	$400
December	600	$310

Represent the electricity cost function in equation form. (Round answers to 2 decimal places, e.g. 52.75.)

Total cost = $enter a dollar amount × MH + $enter a dollar amount

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Follow-up Question

Identify the high and low points.

	Machine Hours	$
High point	enter the machine hours for high point	$enter the high point in dollars
Low point	enter the machine hours for low point	$enter the low point in dollars

Using the high-low method, compute the variable cost of electricity per machine hour. (Round unit cost to 2 decimal places, e.g. 52.75.)

Variable cost

$enter the variable cost per machine hour in dollars per machine hour

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Follow-up Question

What is the expected electricity cost when 740 machine hours are used?

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