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.
$$\begin{array} { | l | r | r | }
\hline & { \text { Minutes } } & \text { Total Bill } \
\hline \text { Jan} & 300 & \$ 2,650 \
\hline \text { Feb } & 150 & \$ 2,575 \
\hline \text { Mar } & 100 & \$ 2,550 \
\hline \text { Apr } & 250 & \$ 2,625 \
\hline
\end{array}$$
-
If the company uses 280 minutes in May, how much will the total bill be?

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.
$$\begin{array} { | l | r | r | } 
\hline & { \text { Minutes } } & \text { Total Bill } \
\hline \text { Jan} & 300 & \$ 2,650 \
\hline \text { Feb } & 150 & \$ 2,575 \
\hline \text { Mar } & 100 & \$ 2,550 \
\hline \text { Apr } & 250 & \$ 2,625 \
\hline
\end{array}$$
-
If the company uses 280 minutes in May, how much will the total bill be?

Quizplus · Accepted Answer

Using the high-low method, the variable cost per minute is calculated as ($2,650 - $2,550) / (300 - 100) = $0.50. The fixed cost is $2,550 - (100 * $0.50) = $2,500. For 280 minutes, the total bill is $2,500 + (280 * $0.50) = $2,640.

The Phone Bill for a CPA Firm Is a Mixed