Answered

Discover the answers to your questions at Westonci.ca, where experts share their knowledge and insights with you. Join our platform to connect with experts ready to provide precise answers to your questions in different areas. Get detailed and accurate answers to your questions from a dedicated community of experts on our Q&A platform.

On the basis of this information, what were total maintenance costs when the company experienced 23,000 machine hours of activity, total maintenance costs averaged $34.30 per hour. When activity jumped to 27,000 machine hours, which was still within the relevant range, the average total cost per machine hour was $27.30.

a. On the basis of this information, the variable cost per machine hour was:___________
b. On the basis of this information, the fixed cost was:___________-
c. On the basis of this information, what were total maintenance costs when the company experienced 25,000 machine hours?

Sagot :

facundobuzzetti

Answer:

Results are below.

Explanation:

First, we need to calculate the total cost for each activity level:

High activity level= 27,000*27.3= $737,100

Low activity level= 23,000*34.3= $788,900

Now, using the high-low method, we can determine the variable and fixed costs:

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (788,900 - 737,100) / (27,000 - 23,000)

Variable cost per unit= $12.95 per machine-hour

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 788,900 - (12.95*27,000)

Fixed costs= $439,250

Fixed costs= LAC - (Variable cost per unit* LAU)

Fixed costs= 737,100 - (12.95*23,000)

Fixed costs= $439,250

Finally, for 25,000 hours:

Total cost= 439,250 + 12.95*2,5000

Total cost= $763,000

We appreciate your visit. Our platform is always here to offer accurate and reliable answers. Return anytime. We appreciate your visit. Our platform is always here to offer accurate and reliable answers. Return anytime. Your questions are important to us at Westonci.ca. Visit again for expert answers and reliable information.