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XGmargin of safety formus+ hittps Help Save & E hapters 19 to 22 Homework Project: Due... 0 Che 10 s available for a company\'s maintenance cost over the last seven months Maintenance Maintenance Cos 3.33 June uly August September October November December $ 4,516 5,958 4,998 5,710 7,150 7,878 3,558 17 13 16 25 Pyint Using the high-low method, estimate both the fixed and variable components of its maintenance cost High-Low method-Calculation of variable cost per maintenance hour Prev 10 of t8H? Next > pe here to search

Solution

Answers

Months

Hours

Cost

High Level

Nov

25

$      7,870.00

Low Level

December

7

$      3,550.00

Difference

18

$      4,320.00

Difference in Cost

$                                     4,320.00

Difference in units

18

Variable cost per unit

$                                         240.00 [4320 / 18]

Working

High Level

Low Level

A

Total Cost

$        7,870.00

$      3,550.00

B

Total Units

25

7

C

Variable cost per unit

$            240.00

$          240.00

D = B x C

Total Variable cost

$        6,000.00

$      1,680.00

E = A - D

Total Fixed Cost

$        1,870.00

$      1,870.00

Total Cost at the high Point

$        7,870.00

Variable cost at the high Point:

Volume at the high point

25

Variable cost per hour/unit

$     240.00

Total Variable cost at the high point

$        6,000.00

Total Fixed Costs

$        1,870.00

Total cost at the low point

$        3,550.00

Variable cost at the Low Point:

Volume at Low Point

7

Variable cost per hour/unit

$     240.00

Total Variable cost at the low point

$        1,680.00

Total Fixed Costs

$        1,870.00

	Months	Hours	Cost
High Level	Nov	25	$      7,870.00
Low Level	December	7	$      3,550.00
Difference		18	$      4,320.00