The recent high and low levels of hours operated and monthly repair cost for heavy equipment for Universal Mfg. are shown below:

-Refer to the above data. Using the high-low method, compute the variable element of repair cost per hour of operation for Universal's equipment.

Question

The recent high and low levels of hours operated and monthly repair cost for heavy equipment for Universal Mfg. are shown below:
 
-Refer to the above data. Using the high-low method, compute the variable element of repair cost per hour of operation for Universal's equipment.

Quizplus · Accepted Answer

The high-low method calculates the variable cost per unit by taking the difference in costs between the highest and lowest activity levels and dividing it by the difference in activity levels. Here, the variable element of repair cost per hour is $0.30.

The Recent High and Low Levels of Hours Operated and Monthly