The phone bill for a company consists of both fixed and variable costs.Refer to the four-month data below and apply the high-low method to answer the question.(Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar. ) $$\begin{array} { | l | r | r | }
\hline & \text { Minutes } & \text { Total Bill } \
\hline \text { Tanuary } & 460 & \$ 3,000 \
\hline \text { February } & 200 & \$ 2,675 \
\hline \text { March } & 180 & \$ 2,630 \
\hline \text { April } & 320 & \$ 2,840 \
\hline
\end{array}$$ What is the fixed portion of the total cost?

Question

The phone bill for a company consists of both fixed and variable costs.Refer to the four-month data below and apply the high-low method to answer the question.(Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar. ) $$\begin{array} { | l | r | r | } 
\hline & \text { Minutes } & \text { Total Bill } \
\hline \text { Tanuary } & 460 & \$ 3,000 \
\hline \text { February } & 200 & \$ 2,675 \
\hline \text { March } & 180 & \$ 2,630 \
\hline \text { April } & 320 & \$ 2,840 \
\hline
\end{array}$$ 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 highest activity is 460 minutes ($3,000) and the lowest is 180 minutes ($2,630). The variable cost per minute is ($3,000 - $2,630) / (460 - 180) = $1.32. The fixed cost is calculated by subtracting the total variable cost at either the high or low point from the total cost: $3,000 - (460 * $1.32) = $2,393.

The Phone Bill for a Company Consists of Both Fixed