Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to calculate Bounty' variable utilities costs per machine hour. Round your answer to the nearest cent. Cost Machine Hours March $3,100 15,000 April 2,700 10,000 May 2,900 12,000 June 3,600 18,000 a. $0.67 b. $10.00 c. $0.63 d. $0.11

Question

Business

Liana Gilmore

6 September, 02:51

Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to calculate Bounty' variable utilities costs per machine hour. Round your answer to the nearest cent. Cost Machine Hours March $3,100 15,000 April 2,700 10,000 May 2,900 12,000 June 3,600 18,000 a. $0.67 b. $10.00 c. $0.63 d. $0.11

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Answers (1)

Know the Answer?

Anna Mcneil · Answer 1

The option d is correct.

Explanation:

The high low method shows the difference between the high and low cost of a particular thing. In the given question, the high cost is $3,600 and the low cost is $2,700 whereas the high machine hour is 18000 and low machine hour is 10,000.

Now, the formula for high low method is calculated. It is shown below:

High low method = (High cost - Low cost) : (High machine hours - Low machine hours)

= ($3,600 - $2,700) : (18000 - 10,000)

= 900 : 8000

= 0.11

Thus, the option d is correct.