The managerial accountant at Hampson Company reported the following information:

Required:
Use the high-low method to compute the difference of the Cost Driver: Machine Hours,the Difference of the Indirect Manufacturing Labor,and the slope coefficient b for each machine hour.

Question

The managerial accountant at Hampson Company reported the following information:

Required:
Use the high-low method to compute the difference of the Cost Driver: Machine Hours,the Difference of the Indirect Manufacturing Labor,and the slope coefficient b for each machine hour.

Quizplus · Accepted Answer

B)Difference between cost drivers: [(120 - 55)] = 65 machine hours
Difference between indirect manufacturing labor: [($1,750 - $845)] = $905
Slope coefficient = [($905 / 65)] = $13.92 per machine hour

The Managerial Accountant at Hampson Company Reported the Following Information