QS 21-3 Cost habits estimation-high-low an approach LO P1 The adhering to information is obtainable for a company’s maintenance price over the last 7 months.
You are watching: Using the high-low method, estimate both the fixed and variable components of its maintenance cost.
|The adhering to information is easily accessible for a company’s maintenance expense over the last 7 months.|
|Month||maintain Hours||maintain Cost|
|Using the high-low method, calculation both the fixed and also variable materials of its maintenance cost.|
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|$8,100 – $3,600|
|Variable costs =||= $250 per maintain hour|
|24 – 6|
|Using the low point, $3,600 = ($250/maint. Hr. × 6 maint. Hrs.) + solved cost.|
|Therefore, fixed price = $2,100|