Tijuana Tile has gathered the following information on its utility costs for the past six months. Machine Hours Utility Cost 1,300 ......$ 940 1,700 ......1,075 1,250 ....... 900 1,800 ......1,132 1,900 ......1,160 1,500 ...... 990 a. Using the high–low method, determine the cost formula for utility costs. b. Prepare a flexible budget with separate variable and fixed categories for utility

Tijuana Tile has gathered the following information on its utility costs for the past six months.

Machine Hours Utility Cost

1,300 ......$ 940

1,700 ......1,075

1,250 ....... 900

1,800 ......1,132

1,900 ......1,160

1,500 ...... 990

a. Using the high–low method, determine the cost formula for utility costs.

b. Prepare a flexible budget with separate variable and fixed categories for utility costs at 1,325, 1,500, and 1,675 machine hours.


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Related Book For answer-question

Cost Accounting Foundations and Evolutions

8th Edition

Authors: Michael R. Kinney, Cecily A. Raiborn

ISBN: 978-1111626822