Reference: 06-07
Gargymal Company Would Like to Estimate the Variable

question 51

Multiple Choice

Reference: 06-07
Gargymal Company would like to estimate the variable and fixed components of its electrical costs and has compiled the following data for the last five months of operations. $$\begin{array} { | l | l | l | } \hline & \text { Machine Hours } & \text { Electrical Cost } \\\hline \text { August } & 1,000 & \$ 1,550 \\\hline \text { September } & 900 & 1,510 \\\hline \text { October } & 1,500 & 1,750 \\\hline \text { November } & 2,000 & 1,950 \\\hline \text { December } & 1,300 & 1,670 \\\hline\end{array}$$
-Using the high-low method of analysis, the estimated variable cost per machine hour for electricity is closest to?

• A)$0.98.
• B)$1.68.
• C)$0.40.
• D)$2.50.

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Definitions:

Expectancies

Beliefs or assumptions about the likelihood of future events or outcomes.

Conditions

Specific factors or circumstances that affect situations, actions, or phenomena, determining their outcomes or the manner in which they occur.

Dilemmas

Situations that require a choice between options that are or seem equally unfavorable or mutually exclusive.

Crises

Periods of significant change or turmoil in an individual's or group's life, often prompting a need for major decisions or adjustments.