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Prince Albert Company Makes Cross-Country Skis A Using the High-Low Method, Compute the Variable Rate of Calculate

Question 132

Essay

Prince Albert Company makes cross-country skis.The company controller wants to calculate the fixed and variable costs associated with janitorial services incurred by the factory.Data for the past six months were collected.
Required:
 Janitorial  Labour  Month  cost  hours  January $9,20010,120 February 8,8009,500 March 9,35010,500 April 9,62011,100 May 8,4008,660 June 9,40010,650\begin{array}{lrr}& \text { Janitorial } & \text { Labour } \\\text { Month } & \text { cost } & \text { hours }\\\text { January } & \$ 9,200 & 10,120 \\\text { February } & 8,800 & 9,500 \\\text { March } & 9,350 & 10,500 \\\text { April } & 9,620 & 11,100 \\\text { May } & 8,400 & 8,660 \\\text { June } & 9,400 & 10,650\end{array} A. Using the high-low method, compute the variable rate of the janitorial cost.
B. Using the high-low method, compute the fixed cost of j j anitorial services.
C. Compute the estimated janitorial cost to be incurred during the next six months assuming that 58,200 labour hours will be worked.

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