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    Argosy University/ Phoniex University/
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Category > Accounting Posted 24 Sep 2017 My Price 7.00

Variable Cost Analysis

Variable Cost Analysis

Zero Time Oil Change has been in business for six months. The company pays $0.50 per quart for the oil it uses in servicing cars. Each job requires an average of 4 quarts of oil. The company estimates that in the next three months, it will service 240, 288, and 360 cars.

1.Compute the cost of oil for each of the three months and the total cost for all three months.

Month

Volume in Machine Hours

Electricity Cost

July

6,000

$60,000

August

5,000

53,000

September

4,500

49,500

October

4,000

46,000

November

3,500

42,500

December

3,000

39,000

Six-month total

26,000

$290,000

Using the high-low method, determine the variable electricity cost per machine hour and the monthly fixed electricity cost. Estimate the total variable electricity costs and fixed electricity costs if 4,800 machine hours are projected to be used next month.

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Maurice Tutor
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Status NEW Posted 24 Sep 2017 11:09 PM My Price 7.00

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