high low method machine hours

Using the high-low method develop an estimate of variable electricity costs per machine hour. Course Title ACC 211.

High Low Method Definition

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. 4 It is assumed that there is no consumption of electricity during loading and unloading time. The organization increments salaries and wages by 10 at the start of the. Based on the following information calculate fixed costs per month using the high-low method.

The companys relevant range of activity varies from a low of 600 machine hours to a high of 1200 machine hours with the following data being available for the first six months of the year. Pages 55 Ratings 100 3 3 out of 3 people found this document helpful. It takes the highest and lowest activity levels and compares their total costs.

Literature guides Concept explainers Writing guide Popular textbooks Popular high school textbooks Popular QA Business Accounting Economics Finance Leadership Management Marketing Operations Management Engineering Bioengineering Chemical Engineering Civil Engineering. Round the variable rate to three decimal places. 2 Loading and unloading time is 10 of machine time.

5 Interest has been treated as an element of cost. 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. Quarter Work hours Cost 1 15000 4000000 2 20000 4800000 3 18000 4400000 4 21000 5000000.

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. View high low methoddocx from BSMA 401 at STI College multiple campuses. School The University of Queensland.

Barkoff Enterprises which uses the high-low method to analyze cost behavior has determined that machine hours best explain the companys utilities cost. Machine Hours 9000 3000 6000 Highest Lowest Difference Utility Cost 1960 880 1080 a. Meyer Company which uses the high-low method to analyze cost behavior has determined that machine hours best predict the companys total utilities cost.

Machine Hours 22000 32000 26000 24000 Cost 56000 May June July August Oa. A company incurred 12000 of maintenance cost for 6500 machine hours in June and 14250 of maintenance costs for 8000 hours in August. High Low Method is a mathematical technique used to determine the fixed and variable elements of historical costs that are.

Based on the following information calculate fixed costs per month using the high-low method. Part 1 High-Low Method 12 Points. 1 Total working hours per annum are 200 x 12 2400.

Learn vocabulary terms and more with flashcards games and other study tools. HIGH-LOW METHOD Key Terms and Concepts to Know Variable Fixed and Mixed Costs Many costs are clearly variable such as direct labor and direct materials. Period Semi-Variable Costs Machine Hours 1 100000 22000 2 120000 30000 3 96000 23600 If 29000 machine hours were budgeted for the.

The high low method is a simple technique for computing the variable cost rate and the total amount of fixed coststhat are part of mixed costs mixed costs are costs. It is used to observe changes in the dependent variable relative to changes in the. The high low method uses a small amount of data to separate fixed and variable costs.

11000 76000 58000 66000. Machine Hours Electrical Cost January 4000 3120 February 6000 4460 March. Example of High-Low Method.

The companys cost and machine hour usage data for the first six months of the year follow. Assuming these are the high and low months of activity. Solution for Using high low method compute for the Variable cost Rhea.

囲 Click the. 3 Effective working hours are 2160 hours 2400 10 of 2400. Determine the amount of the fixed portion of indirect labor expense and the variable rate for indirect labor expense using the high and low points method.

On the other hand regression analysis shows the relationship between two or more variables. The company wants to know the rate at which its electricity cost changes when the number of machine hours change. Now the formula for high low method is calculated.

Requirements Using the high-low method answer the following questions 1. Assume that the cost of electricity at a small manufacturing facility is a mixed cost since the company has only one electricity meter for air quality cooling lighting and for its production equipment. Month Machine Hours Electricity Costs January 2000 12000 February 2320 10500 March 1560 6650 April 2480 11500 May 3040 14125 June 2640 11000 July 3280 12375 August 2800 11375 September 1600 6700.

High low method 1 machine hours maintenance costs. High Low Method In Accounting Definition Formula It is shown below. Machine hours and electricity costs for IJMAC Industries for 2013.

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