Figure 3-5.Maxwell Company makes treadmills. The company controller wants to calculate the fixed and variable costs associated with the janitorial costs incurred in the factory. Data for the past four months were collected.
-Refer to Figure 3-5. Using the high-low method calculate the fixed cost of the janitorial services

Question

Figure 3-5.Maxwell Company makes treadmills. The company controller wants to calculate the fixed and variable costs associated with the janitorial costs incurred in the factory. Data for the past four months were collected. 
-Refer to Figure 3-5. Using the high-low method calculate the fixed cost of the janitorial services

Quizplus · Accepted Answer

The high-low method involves taking the highest and lowest activity levels and their associated costs to determine the variable cost per unit and fixed costs. The fixed cost is calculated by subtracting the total variable cost at either the high or low activity level from the total cost at that level.