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) $\begin{array}{|l|r|r|}
\hline& \text { Minutes } & \text { Total Bill } \
\hline \text { Tanuary } & 460 & \$ 3,000 \
\hline \text { February } & 200 & \$ 2,673 \
\hline \text { March } & 160 & \$ 2,625 \
\hline \text { April } & 300 & \$ 2,800 \
\hline
\end{array}$
- 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) $\begin{array}{|l|r|r|} 
\hline& \text { Minutes } & \text { Total Bill } \
\hline \text { Tanuary } & 460 & \$ 3,000 \
\hline \text { February } & 200 & \$ 2,673 \
\hline \text { March } & 160 & \$ 2,625 \
\hline \text { April } & 300 & \$ 2,800 \
\hline
\end{array}$
- 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 $(\$3,000 - \$2,625) / (460 - 160) = \$1.25$. The fixed cost is then calculated using either the high or low point: $ \$3,000 - (460 \times \$1.25) = \$2,425$.

The Phone Bill for an Accounting Firm Consists of Both