Use the following information to answer the following Questions
Fulton and Sons, Inc. presently leases a copy machine under an agreement that calls for a fixed fee each month and a charge for each copy made. Fulton made 7,000 copies and paid a total of $360 in March; in May, the firm paid $280 for 5,000 copies. The company uses the high-low method to analyze costs.
-Fulton's monthly fixed fee is:
A) $80.
B) $102.
C) $106.
D) $112.
E) None of the answers is correct.

Question

Quizplus · Accepted Answer

Using the high-low method, the variable cost per copy is ($360 - $280) / (7,000 - 5,000) = $0.04. The fixed fee is calculated by subtracting the total variable cost from the total cost for either month. For March: $360 - ($0.04 * 7,000) = $80.

Use the Following Information to Answer the Following Questions