The phone bill for a CPA firm is a mixed cost. Please refer to the 4-month data below, apply the high-low method, and answer the question.
$$\begin{array} { | l | r | r | }
\hline & { \text { Minutes } } & \text { Total Bill } \
\hline \text { Jan } & 300 & \$ 2,650 \
\hline \text { Feb } & 150 & \$ 2,575 \
\hline \text { Mar } & 100 & \$ 2,550 \
\hline \text { Apr } & 250 & \$ 2,625 \
\hline
\end{array}$$
-
How much is the variable cost per minute?

Question

The phone bill for a CPA firm is a mixed cost. Please refer to the 4-month data below, apply the high-low method, and answer the question.
$$\begin{array} { | l | r | r | } 
\hline & { \text { Minutes } } & \text { Total Bill } \
\hline \text { Jan } & 300 & \$ 2,650 \
\hline \text { Feb } & 150 & \$ 2,575 \
\hline \text { Mar } & 100 & \$ 2,550 \
\hline \text { Apr } & 250 & \$ 2,625 \
\hline
\end{array}$$
-
How much is the variable cost per minute?

Quizplus · Accepted Answer

The variable cost per minute is $0.50. This is calculated by dividing the difference in total cost between the high and low activity levels by the difference in activity levels. In this case, the difference in total cost is $2,650 - $2,550 = $100, and the difference in activity levels is 300 - 100 = 200 minutes. Therefore, the variable cost per minute is $100 / 200 = $0.50.

The Phone Bill for a CPA Firm Is a Mixed