Answer the following questions using the information below:
Syosis Company uses the high-low method to estimate its cost function. The information for 2015 is provided below:
$\begin{array}{lll}&\text { Machine-hours }& \text { Costs }\
\text { Highest observation of cost driver } & 2,500 & \$ 300,000 \
\text { Lowest observation of cost driver } & 1,500 & \$ 220,000
\end{array}$
-What is the estimated total cost when 1,300 machine-hours are used?
A) $411,100
B) $204,000
C) $456,000
D) $156,000

Question

Answer the following questions using the information below:
Syosis Company uses the high-low method to estimate its cost function. The information for 2015 is provided below:
 $\begin{array}{lll}&\text { Machine-hours }& \text { Costs }\
\text { Highest observation of cost driver } & 2,500 & \$ 300,000 \
\text { Lowest observation of cost driver } & 1,500 & \$ 220,000
\end{array}$
-What is the estimated total cost when 1,300 machine-hours are used?
A) $411,100
B) $204,000
C) $456,000
D) $156,000

Quizplus · Accepted Answer

The variable cost per machine-hour is calculated as ($300,000 - $220,000) / (2,500 - 1,500) = $80. The fixed cost is $300,000 - (2,500 * $80) = $100,000. For 1,300 machine-hours, the total cost is $100,000 + (1,300 * $80) = $204,000.

Answer the Following Questions Using the Information Below: Syosis Company

Answer the Following Questions Using the Information Below:
Syosis Company