MANAGEMENT SERVICES (BAINTE4X)
HO1 - COSTS BEHAVIOR, DETERMINATION AND PREDICTION
PROBLEM NO. 1
The following six months of data were collected on
electricity cost and the number of machine hours in a
factory.
MONTH
June
July
August
September
October
November
Requirements:
1. Using the high-low method compute the variable rate for the
electricity cost.
2. Using the high-low method compute the fixed cost of electricity.
3. Estimate the total electricity cost to be incurred in December if
5,300 machine hours are incurred.
VC
ELECTRICITY COST MACHINE HOURS
25,160.00
4,500
26,170.00
4,810
27,250.00
5,120
26,680.00
5,010
27,950.00
5,430
27,500.00
5,190