Asked by Yousef Abualhawa on Jul 22, 2024
Verified
Using the high-low method, the variable cost per machine hour would be:
A) $0.67
B) $0.64
C) $0.40
D) $0.60
High-low Method
A technique used in managerial accounting to estimate fixed and variable costs based on the highest and lowest levels of activity.
Variable Cost
Costs that change in proportion to the activity or business volume, such as materials and labor directly involved in production.
- Ascertain the variable expense for each unit.
Verified Answer
AN
Alungile NqwenyanaJul 27, 2024
Final Answer :
D
Explanation : 
Variable cost = Change in cost ÷ Change in activity
Variable cost = $720 ÷ 1,200 machine-hours = $0.60 per machine-hour
Variable cost = Change in cost ÷ Change in activityVariable cost = $720 ÷ 1,200 machine-hours = $0.60 per machine-hour
Learning Objectives
- Ascertain the variable expense for each unit.
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