Question

the missoue manufacuting company recorder overhead costs of 14272 at an activity level of 4650 machine hours and 8622 at 2390 machine hours. what is the total estimated cost for 2690 machine hours using yhe high low method to estimate the cost queation

Answer 1

$9,372

Step-by-step explanation:

The computation of the total estimated cost is shown below;

Variable Cost Per Unit is

= ($14,272 - $8,622) ÷ (4,650 - 2,390)

= $2.50

Now the Fixed Cost is

= $14,272 - 4,650 × $2.50

= $2,647

Now the total estimated cost is

= $2,647 + 2,690 × $2.50

= $9,372