Question: Refer to the data in Exercise 2-8. In Exercise 2-8. Stratton, Inc., has collected the following information on its cost of electricity: Required a. Using

Refer to the data in Exercise 2-8.
In Exercise 2-8.
Stratton, Inc., has collected the following information on its cost of electricity:

Required
a. Using the high-low method, compute the variable cost of electricity per machine hour.
b. Compute the total fixed cost of electricity.
c. Represent the electricity cost function in equation form.
d. What is the expected electricity cost when 750 machine hours are used?
e. Why does your answer to part (d) differ from the actual cost for the month of October, when 750 machine hours were used?

Machine Electricity Costs January September November

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a Variable cost 360 120840 240 040 per machine hour b Fixed cost using the low point 120 04... View full answer

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