Question: Jackson, Inc., is preparing a flexible budget for next year and requires a breakdown of the cost of steam used in its factory into the
Jackson, Inc., is preparing a flexible budget for next year and requires a breakdown of the cost of steam used in its factory into the fixed and variable elements. The following data on the cost of steam used and direct labor hours worked are available for the last 6 months of this year:
| Month | Cost of Steam | Direct Labor Hours | |||||
| | | | |||||
| July | $ 15,850 | 3,000 | |||||
| August | 13,400 | 2,050 | |||||
| September | 16,370 | 2,900 | |||||
| October | 19,800 | 3,650 | |||||
| November | 17,600 | 2,670 | |||||
| December | 18,500 | 2,650 | |||||
| Total | $101,520 | 16,920 |
Assuming that Jackson uses the high-low method of analysis, the estimated variable cost of steam per direct labor hour is __________?
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
