Maurice Tutor

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Category > Accounting Posted 24 Jul 2017 My Price 5.00

Indiana Industrial’s utility cost

(High–low method) Information about Indiana Industrial’s utility cost for the last six months of 2010 follows. The high–low method will be used to develop a cost formula to predict 2011 utility charges, and the number of machine hours has been found to be an appropriate cost driver. Data for the first half of 2010 are not being considered because the utility company imposed a significant rate change as of July 1,2010.

Month

Machine Hours

Utility Cost

July

33,750

$13,000

August

34,000

12,200

September

33,150

11,040

October

32,000

11,960

November

31,250

11,500

December

31,000

11,720

a. What is the cost formula for utility expense?

b. What is the budgeted utility cost for September 2011 if 31,250 machine hours are projected?

Answers

Maurice Tutor
(5)
Status NEW Posted 24 Jul 2017 12:07 AM My Price 5.00

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