Homework Answers
ANSWER:
High low point method is used to separate costs into its fixed and variable components.
Formula: variable cost per machine hour = (highest activity cost - lowest activity cost)/(highest activity machine hours - lowest activity machine hours)
Therefore, variable cost per machine hour = ($88000 - $67000)/(99000 - 63000)
= $21000/36000
= $0.58
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product, which they call a toodle. For planning and control
purposes they utilize a quarterly master budget, which is
usually developed at least six months in advance of the budget
period. Their fiscal year end is December 31.
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