Using the high-low method and the information below,compute the monthly total fixed costs for SKP Corporation. $$\begin{array} { l l l }
\text { Month } & \text { Telephone Hours Used } & \text { Telephane Expense: } \
\text { Apri } & 100 & \$ 4,500 \
\text { May } & 110 & 4,800 \
\text { June } & 150 & 5,400
\end{array}$$

Question

Using the high-low method and the information below,compute the monthly total fixed costs for SKP Corporation. $$\begin{array} { l l l } 
\text { Month } & \text { Telephone Hours Used } & \text { Telephane Expense: } \
\text { Apri } & 100 & \$ 4,500 \
\text { May } & 110 & 4,800 \
\text { June } & 150 & 5,400
\end{array}$$

Quizplus · Accepted Answer

The high-low method calculates variable cost per unit as (Change in cost) / (Change in activity). Here, it's ($5,400 - $4,500) / (150 - 100) = $18 per hour. Fixed cost is then calculated using either high or low point: $5,400 - (150 * $18) = $2,700.

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