The Macon Company uses the high-low method to determine its cost equation. The following information was gathered for the past year:
$$\begin{array} { l c c }
& \text { Machine } & \text { Direct Labor } \
& \text { Hours } & \text { Costs } \
\text { Busiest month (June) }& 14,000 & \$ 2 0 0 , 0 0 0 \
\text { Slowest month (December) }& 6,000 & \$ 120,000
\end{array}$$
-
What are the direct labor costs per machine hour?
A) $20.00.
B) $16.00.
C) $14.29.
D) $10.00.

Question

The Macon Company uses the high-low method to determine its cost equation. The following information was gathered for the past year:
$$\begin{array} { l c c } 
& \text { Machine } & \text { Direct Labor } \
 & \text { Hours } & \text { Costs } \
 \text { Busiest month (June) }& 14,000 & \$ 2 0 0 , 0 0 0  \
\text { Slowest month (December) }& 6,000 & \$ 120,000
\end{array}$$
-
What are the direct labor costs per machine hour?
A) $20.00.
B) $16.00.
C) $14.29.
D) $10.00.

Quizplus · Accepted Answer

The Answer of The Macon Company uses the high-low method to determine its cost equation. The following information was gathered for the past year:
$$\begin{array} { l c c } 
& \text { Machine } & \text { Direct Labor } \
 & \text { Hours } & \text { Costs } \
 \text { Busiest month (June) }& 14,000 & \$ 2 0 0 , 0 0 0  \
\text { Slowest month (December) }& 6,000 & \$ 120,000
\end{array}$$
-
What are the direct labor costs per machine hour?
A) $20.00.
B) $16.00.
C) $14.29.
D) $10.00.

The Macon Company Uses the High-Low Method to Determine Its