Hiss Corporation's activity for the last six months is as follows: Using the high-low method of analysis, the estimated fixed cost per month for electricity is closest to: (Round your intermediate calculations to 2 decimal places.)

Question

Hiss Corporation's activity for the last six months is as follows:  Using the high-low method of analysis, the estimated fixed cost per month for electricity is closest to: (Round your intermediate calculations to 2 decimal places.)

Quizplus · Accepted Answer

11eacbfc_c8b2_0b39_8ffe_4712c4a32fa8_TB7552_00 Variable cost = Change in cost ÷ Change in activity
Variable cost = $780 ÷ 1,200 machine-hours = $0.65 per machine-hour
Fixed cost = Total cost − Variable cost
Fixed cost = $2,230 − ($0.65 per machine-hour × 3,000 machine-hours) = $280

Hiss Corporation's Activity for the Last Six Months Is as Follows