2) Electrical costs at one of Kantola Corporation's factories are listed below: Machine-Hours Electrical Cost 3,570...
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2) Electrical costs at one of Kantola Corporation's factories are listed below: Machine-Hours Electrical Cost 3,570 $36,405 February March 3,580 $36,493 April..... 3,553 $36,302 3,627 $36,833 May June 3,625 $36,800 3,565 $36,366 July......... August...... 3,548 $36,237 3,542 $36,213 September..... October...... 3,593 $36,577 Management believes that electrical cost is a mixed cost that depends on machine-hours. Requirement a) Use the high-low method to estimate the variable and fixed components of this cost. Compute the variable component first, rounding off to the nearest whole cent. Then compute the fixed component, rounding off to the nearest whole dollar. b) If the company incurred 6723 machine-hours during November. What would be the electrical cost of November? (7 marks) 2) Electrical costs at one of Kantola Corporation's factories are listed below: Machine-Hours Electrical Cost 3,570 $36,405 February March 3,580 $36,493 April..... 3,553 $36,302 3,627 $36,833 May June 3,625 $36,800 3,565 $36,366 July......... August...... 3,548 $36,237 3,542 $36,213 September..... October...... 3,593 $36,577 Management believes that electrical cost is a mixed cost that depends on machine-hours. Requirement a) Use the high-low method to estimate the variable and fixed components of this cost. Compute the variable component first, rounding off to the nearest whole cent. Then compute the fixed component, rounding off to the nearest whole dollar. b) If the company incurred 6723 machine-hours during November. What would be the electrical cost of November? (7 marks)
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Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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