Using the high-low method and the information below,compute the monthly variable cost per telephone hour for SKP Corporation. $$\begin{array} { l l c }
\text { Month } & \text { Telephone Hours Used } & \text { Telephone Expenses } \
\text { April } & 100 & \$ 4,500 \
\text { May } & 110 & 4,800 \
\text { June } & 150 & 5,400
\end{array}$$

Question

Using the high-low method and the information below,compute the monthly variable cost per telephone hour for SKP Corporation. $$\begin{array} { l l c } 
\text { Month } & \text { Telephone Hours Used } & \text { Telephone Expenses } \
\text { April } & 100 & \$ 4,500 \
\text { May } & 110 & 4,800 \
\text { June } & 150 & 5,400
\end{array}$$

Quizplus · Accepted Answer

The high-low method calculates the variable cost per unit by taking the difference in costs and dividing by the difference in activity levels. Here, the difference in telephone expenses between June and April is $900 ($5,400 - $4,500), and the difference in telephone hours is 50 (150 - 100). Thus, the variable cost per telephone hour is $900 / 50 = $18.00.

Using the High-Low Method and the Information Below,compute the Monthly