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.
$\begin{array}{|l|l|l|}
\hline & \text { Cost } & \text { Machine Hours } \
\hline \text { September } & \$ 4,100 & 22,000 \
\hline \text { October } & 3,700 & 18,000 \
\hline \text { November } & 3,900 & 19,000 \
\hline \text { December } & 4,500 & 28,000 \
\hline & & \
\hline
\end{array}$

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.
 $\begin{array}{|l|l|l|}
\hline & \text { Cost } & \text { Machine Hours } \
\hline \text { September } & \$ 4,100 & 22,000 \
\hline \text { October } & 3,700 & 18,000 \
\hline \text { November } & 3,900 & 19,000 \
\hline \text { December } & 4,500 & 28,000 \
\hline & & \
\hline
\end{array}$

Quizplus · Accepted Answer

The high-low method uses the highest and lowest activity levels. The variable cost per machine hour is calculated as (Cost at highest activity - Cost at lowest activity) / (Highest activity hours - Lowest activity hours) = ($4,500 - $3,700) / (28,000 - 18,000) = $0.08.

Given the Following Cost and Activity Observations for Leno Enterprises