(Answered) Problem - electrical costs at one of gotch corporations

Accounting

Problem - 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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