Refer to the data in Exercise 2-8. Data From Exercises 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
Refer to the data in Exercise 2-8.
Data From Exercises 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?
Transcribed Image Text:
Machine Total January February Hours 510 Electricity Costs $240 $300 540 March 360 $205 April May 450 $215 660 $290 690 $300 $180 $260 June July August September October 340 520 240 $120 750 $340 November 840 $360 December 600 $320
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- Tutor Answer
a Variable cost 360 120 840 240 0 40 per machine hour b Fixed cost using the low point …View the full answer
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Question Details
Chapter #
2
Section: Exercises
Problem: 9
Posted Date: May 03, 2021 07:27:07
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