If the controller uses the high-low method to estimate costs,the fixed cost portion of the cost equation for electricity cost is:
A)$3,726.88
B)$1,425.18
C)$1,625.00
D)$22,825.00

Question

Quizplus · Accepted Answer

The high-low method calculates fixed costs by taking the total cost at the highest activity level and subtracting the variable cost (calculated using the change in cost divided by the change in activity) multiplied by the highest activity level. The fixed cost is the remaining amount after accounting for the variable cost.

If the Controller Uses the High-Low Method to Estimate Costs,the