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Determine the fixed and variable costs

Month Machine Hours Utility Cost
Jan 200 $300
Feb 325 440
March 400 480
April 410 490
May 525 620
June 680 790
July 820 840
Aug 900 900

Question 1. Determine the fixed and variable costs using:

A. Scattergraph Method

B. High-Low Method

Question 2. Determine the cost formula using both methods.

Question 3. Within the relevant range, can the formula be reliably used to predict utility cost? Can the a and b values in the cost formula be interpreted as fixed and variable costs? Why or why not?

Question 4. Using both formulas predict the utility cost in a month the uses 850 machine hours?

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Solution Preview :

Prepared by a verified Expert

Accounting Basics: Determine the fixed and variable costs

Reference No:- TGS01619899

Have a Question? (oR Write a Review)

Recent Questions Asked Accounting Basics

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Solution Preview :

Prepared by a verified Expert

Accounting Basics: Determine the fixed and variable costs

Reference No:- TGS01619899

Recent Questions Asked Accounting Basics

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