Answered

At Westonci.ca, we provide clear, reliable answers to all your questions. Join our vibrant community and get the solutions you need. Our platform provides a seamless experience for finding reliable answers from a network of experienced professionals. Experience the ease of finding precise answers to your questions from a knowledgeable community of experts.

Mawson Lumber uses the high­–low method to estimate electricity cost, which varies in relation to machine hours. Based on the following data, how would the cost function be stated if ‘X' is the number of machine hours? Electricity expense Machine hours June $495 410 July $500 400 August $750 900 September $610 500 Group of answer choices $525 + $0.35 X $300 + $0.50 X $500 + $0.50 X $470 + $0.35 X

Sagot :

Zviko

Answer:

Part 1

The electricity cost, which varies in relation to machine hours is $0.50

Part 2

The Cost function will be :

$300 + $0.50 X

Explanation:

High-low method is used to separate the variable and fixed cost element of a mixed cost or semi variable expense.

Step 1 : Determine the variable cost

Variable Cost = ($750 - $500) ÷ (900 - 400)

                       = $0.50

Step 2 : Determine the fixed cost

Total Cost = Variable Cost + Fixed Cost

hence,

Fixed Cost = Total Cost - Variable Cost

using the high point to substitute in the formulae we get :

Fixed Cost = $750 - ($0.50 x 900)

                  = $300

thus,

Total Cost = $300 + $0.50 x

Thank you for choosing our service. We're dedicated to providing the best answers for all your questions. Visit us again. Thank you for choosing our platform. We're dedicated to providing the best answers for all your questions. Visit us again. We're dedicated to helping you find the answers you need at Westonci.ca. Don't hesitate to return for more.