The phone bill for an accounting firm consists of both fixed and variable costs. Refer to the 4-month data below and apply the high-low method to answer the question. (Round your intermediate calculations to two decimal places) $$\begin{array} { | l | r | r | }
\hline & \text { Minutes } & \text { Total Bill } \
\hline \text { Tanuary } & 460 & \$ 3,000 \
\hline \text { February } & 200 & \$ 2,675 \
\hline \text { March } & 160 & \$ 2,625 \
\hline \text { April } & 300 & \$ 2,800 \
\hline
\end{array}$$ What is the fixed portion of the total cost?

Question

The phone bill for an accounting firm consists of both fixed and variable costs. Refer to the 4-month data below and apply the high-low method to answer the question. (Round your intermediate calculations to two decimal places) $$\begin{array} { | l | r | r | } 
\hline & \text { Minutes } & \text { Total Bill } \
\hline \text { Tanuary } & 460 & \$ 3,000 \
\hline \text { February } & 200 & \$ 2,675 \
\hline \text { March } & 160 & \$ 2,625 \
\hline \text { April } & 300 & \$ 2,800 \
\hline
\end{array}$$ What is the fixed portion of the total cost?

Quizplus · Accepted Answer

The high-low method uses the highest and lowest activity levels to estimate variable and fixed costs. The variable cost per minute is calculated as (3000 - 2625) / (460 - 160) = 1.25. The fixed cost is then calculated using either the high or low point: 3000 - (460 * 1.25) = 2425.

The Phone Bill for an Accounting Firm Consists of Both