Michael Paul, a small service firm, uses the high-low method to estimate electricity cost, which varies...
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Michael Paul, a small service firm, uses the high-low method to estimate electricity cost, which varies in relation to machine hours as follows: Month Machine hours Electricity expense May June 110 116 105 $2,750 $2,900 $2,650 $3,350 July August Required: 1. Using the high-low method identify the month that represents: (a) the highest point and (0. 5 mark) (b) the lowest point (0. 5 mark) 2. Calculate the following: (a) The variable cost rate per machine hour of electricity (1.5 mark) (b) The total fixed cost per month (1.5 mark) 3. Write the cost formula for Michael Paul. Using the cost formula, calculate the total electricity cost assuming the plant plans to use 200 machine hours in June. (1 mark) 140 Michael Paul, a small service firm, uses the high-low method to estimate electricity cost, which varies in relation to machine hours as follows: Month Machine hours Electricity expense May June 110 116 105 $2,750 $2,900 $2,650 $3,350 July August Required: 1. Using the high-low method identify the month that represents: (a) the highest point and (0. 5 mark) (b) the lowest point (0. 5 mark) 2. Calculate the following: (a) The variable cost rate per machine hour of electricity (1.5 mark) (b) The total fixed cost per month (1.5 mark) 3. Write the cost formula for Michael Paul. Using the cost formula, calculate the total electricity cost assuming the plant plans to use 200 machine hours in June. (1 mark) 140
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Related Book For
Financial Accounting and Reporting a Global Perspective
ISBN: 978-1408076866
4th edition
Authors: Michel Lebas, Herve Stolowy, Yuan Ding
Posted Date:
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