chapter 18 question 3

Using the high-low method, estimate both the fixed and variable components of its maintenance cost. High-Low method - Calculation of variable cost per maintenance hour 0 Change in cost Change in volume Cost at high point minus cost at low point Volume at high point minus volume at low point Total cost at the high point Variable costs at the high point: Volume at the high point: Variable cost per unit produced Total variable costs at the high point Total fixed costs Total cost at the low point Variable costs at the low point: Volume at the low point: Variable cost per unit produced Total variable costs at the low point Total fixed costs QS 18-3 Cost behavior estimation-high-low method LO P1 The following information is available for a company's maintenance cost over the last seven months. Month June July August September October November December Units Produced 100 160 120 150 210 240 60 Maintenance Cost $ 4,250 5,960 4,440 5,010 6,150 6,720 3,300 Using the high-low method, estimate both the fixed and variable components of its maintenance cost maintenance hour