Given the following cost and activity observations for Leno Enterprises' utilities,use the high-low method to calculate Leno's variable utilities cost per machine hour. $$\begin{array} { | l r r | }
\hline & \text { Cost } & \text { Machine Hours } \
\text { September } & 4,100 & 22,000 \
\text { October } & 3,700 & 18,000 \
\text { November } & 3,900 & 19,000 \
\text { December } & 4,500 & 28,000 \
\hline
\end{array}$$

Question

Given the following cost and activity observations for Leno Enterprises' utilities,use the high-low method to calculate Leno's variable utilities cost per machine hour. $$\begin{array} { | l r r | } 
\hline & \text { Cost } & \text { Machine Hours } \
\text { September } & 4,100 & 22,000 \
\text { October } & 3,700 & 18,000 \
\text { November } & 3,900 & 19,000 \
\text { December } & 4,500 & 28,000 \
\hline
\end{array}$$

Quizplus · Accepted Answer

The variable utilities cost per machine hour is $0.08. This is calculated by dividing the difference in cost between the high and low activity levels by the difference in machine hours between the high and low activity levels. In this case, the difference in cost is $4,500 - $3,700 = $800, and the difference in machine hours is 28,000 - 18,000 = 10,000. Therefore, the variable utilities cost per machine hour is $800 / 10,000 = $0.08.

Given the Following Cost and Activity Observations for Leno Enterprises