Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

3QS

Expert-verified
Financial & Managerial Accounting
Found in: Page 833
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

The following information is available for a company’s maintenance cost over the last seven months. Using the high-low method, estimate both the fixed and variable components of its maintenance cost.

Month

Maintenance hours

Maintenance cost

June

9

$5,450

July

18

6,900

August

12

5,100

September

15

6,000

October

21

6,900

November

24

8,100

December

6

3,600

Answer

Variable component: $250 per hour.

Fixed component: $2,100 per month.

See the step by step solution

Step by Step Solution

Step-By-Step SolutionStep 1: Definition of High-Low Method

The method under which the highest activity and lowest activity are compared with the highest activity cost and lowest activity cost to classify the variable and fixed components of the total cost is known as the high-low method.

Step 2: Calculation of fixed and variable components of cost

Most popular questions for Business-studies Textbooks

Icon

Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.