Management believes that electrical cost is a mixed cost, Ask an Expert

Accounting

Electrical costs at one of Gotch Corporation's factories are listed below:

Machine -Hours Electrical Cost

March ........................ 3,731 $35,243
April .......................... 3,728 35,248
May ........................... 3,765 35,479
June ........................... 3,793 35,651
July ........................... 3,797 35,692
August ........................ 3,701 35,044
September .................... 3,800 35,694
October ....................... 3,735 35,276
November .................... 3,740 35,325

Management believes that electrical cost is a mixed cost that depends on machine-hours. Using the high-low method to estimate the variable and fixed components of this cost, these estimates would be closest to:

a. $0.15 per machine-hour; $35,115 per month
b. $9.11 per machine-hour; $1,249 per month
c. $9.43 per machine-hour; $35,406 per month
d. $6.57 per machine-hour; $10,728 per month

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M945839

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