Problemsamson owns a machine shop in reviewing the shops, Ask an Expert

Accounting

Problem:

Samson owns a machine shop. In reviewing the shop's utility bills for the past 12 months, he found that the highest bill of $2,800 occurred in July when the machines worked 1,400 machine hours. The lowest utility bill of $2,600 occurred in December when the machines worked 900 machine hours.

Required:

Question 1: Calculate the variable rate per machine hour and the total fixed utility cost.

Question 2: Show the equation for determining the total utility cost for the machine shop

Question 3: If Samson anticipates using 1,200 machine hours in January, predict the shop's total utility bill using the equation from requirement (b).

Note: Please provide equation and explain comprehensively and give step by step solution.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91164916

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