CLASS ACTIVITY:CASE PROBLEM The Overland Company wants to develop a cost estimating equation for its monthly cost of electricity. It has the following data: Electricity Cost Direct Labor Hours 1,500 1,700 2,000 1,600 Month January April July October P6,750 7,500 8,500 7,250 Required: Determine the following using the high-low method. a. Variable cost per hour b. Fixed Cost c. Costequation/function d. How much is the total cost with 2,200 labor hours?
CLASS ACTIVITY:CASE PROBLEM The Overland Company wants to develop a cost estimating equation for its monthly cost of electricity. It has the following data: Electricity Cost Direct Labor Hours 1,500 1,700 2,000 1,600 Month January April July October P6,750 7,500 8,500 7,250 Required: Determine the following using the high-low method. a. Variable cost per hour b. Fixed Cost c. Costequation/function d. How much is the total cost with 2,200 labor hours?
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 9DQ: Describe the cost formula for a strictly variable cost such as electrical power cost of 1.15 per...
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