Denapasa Manufacturing leases a vacuum cleaning system for a basic monthly fee plus an additional cost per hour used above a given minimum for each month.Given below is the information for the most recent six-month period on the number of machine hours of use and the total cost under this lease.
$$\begin{array} { l r r }
\text { Month } & \text { Machine Hours } & \text { Total Cost } \
7 & 6,300 & \$ 58,200 \
8 & 4,400 & 49,935 \
9 & 4,700 & 52,390 \
10 & 5,200 & 54,440 \
11 & 5,600 & 56,620 \
12 & 5,000 & 53,800 \

\end{array}$$
You are to provide information for planning on the variable and fixed cost elements in this lease.Use the high-low method to (a)determine the variable cost per machine hour and (b)compute the fixed and variable costs for months 7 and 8.

Question

Denapasa Manufacturing leases a vacuum cleaning system for a basic monthly fee plus an additional cost per hour used above a given minimum for each month.Given below is the information for the most recent six-month period on the number of machine hours of use and the total cost under this lease.
 $$\begin{array} { l r r } 
\text { Month } & \text { Machine Hours } & \text { Total Cost } \
7 & 6,300 & \$ 58,200 \
8 & 4,400 & 49,935 \
9 & 4,700 & 52,390 \
10 & 5,200 & 54,440 \
11 & 5,600 & 56,620 \
12 & 5,000 & 53,800 \

\end{array}$$ 
You are to provide information for planning on the variable and fixed cost elements in this lease.Use the high-low method to (a)determine the variable cost per machine hour and (b)compute the fixed and variable costs for months 7 and 8.

Quizplus · Accepted Answer

The Answer of Denapasa Manufacturing leases a vacuum cleaning system for a basic monthly fee plus an additional cost per hour used above a given minimum for each month.Given below is the information for the most recent six-month period on the number of machine hours of use and the total cost under this lease.
 $$\begin{array} { l r r } 
\text { Month } & \text { Machine Hours } & \text { Total Cost } \
7 & 6,300 & \$ 58,200 \
8 & 4,400 & 49,935 \
9 & 4,700 & 52,390 \
10 & 5,200 & 54,440 \
11 & 5,600 & 56,620 \
12 & 5,000 & 53,800 \

\end{array}$$ 
You are to provide information for planning on the variable and fixed cost elements in this lease.Use the high-low method to (a)determine the variable cost per machine hour and (b)compute the fixed and variable costs for months 7 and 8.

Denapasa Manufacturing Leases a Vacuum Cleaning System for a Basic