Managerial Accounting
Managerial Accounting
14th Edition
ISBN: 9781337270595
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 6, Problem 5DQ
To determine

Explain the significance of the term non – controllable cost. 

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StriveTech Co. uses the high-low method to analyze cost behavior. The company observed that at 18,000 machine hours of activity, total maintenance costs averaged $28.00 per hour. When activity increased to 22,000 machine hours (still within the relevant range), the average total cost per machine hour dropped to $25.00. Based on this information, the fixed cost was: a. $396,000 b. $297,000 c. $308,000 d. $220,000 e. $528,000
Bright Tech Inc. sold one of its divisions at a loss of $80,000. The company's income tax rate is 30%. What is the after-tax loss that will be reported on the income statement?

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