high low method machine hours

Problem 2 Electrical costs at one of R Companys factories are listed below. Machine Hours 9000 3000 6000 Highest Lowest Difference Utility Cost 1960 880 1080 a.

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. Solution for RR Company uses the high-low method to analyze cost behavior. High Low method is a way to calculate the variable and fixed cost element of total cost using lowest level of activity and its cost and highest level of activity and its cost. Note that our fixed cost differs by 635 depending on whether we use the high or low activity cost.

Fixed cost 105450 7497 x 1000 30480. Now the formula for high low method is calculated. The Month Cost Machine Hours May 8646 2650 June 11157 4000 July 11808 4350 August 10785 3800 If machine hours in October are expected to be.

Your solution should show the appropriate formulas and the detailed calculations. Use High and low method to estimate Variable cost per unit 2. Machine Hours Electrical Cost January 4000 3120 February 6000 4460 March 4800 3500 April 5800 5040 May 3600 2900 June 4200 3200 Required.

Quarter Work hours Cost 1 15000 4000000 2 20000 4800000 3 18000 4400000 4 21000 5000000. Period Semi-Variable Costs Machine Hours 1 100000 22000 2 120000 30000 3 96000 23600 If 29000 machine hours were budgeted for the next period estimated semi-variable costs would total A. J Jones Created Date.

A Using the high-low method separate the cost of goods sold and operating expenses into their variable and fixed elements. School The University of Queensland. The company observed that at 20000 machine hours of activity total maintenance costs averaged 3290 per hour.

Pages 55 Ratings 100 3 3 out of 3 people found this document helpful. The high-low method involves taking. View high low methoddocx from BSMA 401 at STI College multiple campuses.

It is a nominal difference and choosing either fixed cost for our cost model will suffice. The utilities cost associated with 1110 machine hours will be 10505. High low method 1 machine hours maintenance costs.

Transfer the information in the table above to an Excel spreadsheet and prepare the solutions to the following questions. Hotlanta Inc which uses the high-low method to analyze cost behavior has determined that machine hours best explain the companys utilities cost. High low method machine hours Saturday March 5 2022 Edit.

High Low Method Accounting Meaning Formula Example And More In 2021 Accounting Accounting Principles Accounting Education. The high-low method of cost accounting is a way of trying to distinguish fixed and variable costs provided a limited amount of data. Based on the following information bartleby.

Using either the high or low activity cost should yield approximately the same fixed cost value. The companys relevant range of activity varies from a low of 600 machine hours to a high of 1100 machine hours with the following data being available for the first six months of the year. X Company uses the high-low method to estimate total overhead costs each month with machine hours as the activity measure.

The organization increments salaries and wages by 10 at the start of the 3rd. This preview shows page 21 - 25 out of 55 pages. The companys relevant range of activity varies from a low of 600 machine hours to a high of 1100 machine hours with the following data being available for the first six months.

Using the high-low method of analysis estimate the variable electrical cost per machine hour. 6 points Atlanta Inc which uses the high-low method to analyze cost behavior has determined that machine hours best explain the companys utilities cost. Solve Y if x 13000 machine hours.

Based on the following information calculate fixed costs. Following past monthly cost and activity information is available. Part 1 High-Low Method 12 Points.

High Low Method of Machine Hours 8000 10000 11000 9000 14000 12000 Total Maintenance Costs 600000 640000 800000 700000 900000 870000 Required. Machine-Hours Electrical Cost March 413 7371 April 506 7740. Course Title ACC 211.

Although the high-low method is straightforward to use its seldom used because it can distort costs because of its reliance on two extreme values from a given data set. High Low Method In Accounting Definition Formula. Machine hours and electricity costs for IJMAC Industries for 2013 were as follows.

Cost Machine Hours May 56000 22000 June 76000 32000 July 58000 26000 August 66000 24000. Uses the high-low method to analyze cost behavior. High Low Method In Accounting Definition Formula It is shown below.

Find the fixed cost 3. B Determine the cost formula for each type of cost. Business Accounting QA Library Based on the following information calculate fixed costs per month using the high-low method.

The company observed that at 2000 machine hours of activity total maintenance costs. State the cost function 4. When activity jumped to 26000 machine hours which was still within the relevant range the average total cost per machine hour was 2690.

High Low Method is a mathematical technique used to determine the fixed and variable elements of historical costs that are partially fixed and partially variable.

High Low Method Definition