Reference: 06-08
Wilson Company's Activity for the First Six Months

question 92

Multiple Choice

Reference: 06-08
Wilson Company's activity for the first six months of the current year is as follows: $$\begin{array} { | l | l | l | } \hline \text { Month } & \text { Machine Hours } & \text { Electrical Cost } \\\hline \text { January } & 2,000 & \$ 1,600 \\\hline \text { February } & 3,000 & \$ 2,200 \\\hline \text { March } & 2,400 & \$ 1,840 \\\hline \text { April } & 1,900 & \$ 1,540 \\\hline \text { May } & 1,800 & \$ 1,480 \\\hline \text { June } & 2,100 & \$ 1,660 \\\hline\end{array}$$
-Using the high-low method, the variable cost per machine hour would be

• A)$0.60.
• B)$0.68.
• C)$0.64.
• D)$0.40.

---

Definitions:

Retail Method

A pricing strategy used in retail to maintain a consistent profit margin by marking up goods based on their wholesale cost.

Retail Method

An accounting method used to estimate ending inventory and cost of goods sold by calculating a cost-to-retail percentage and applying it to the retail price.

Estimated Cost

The anticipated cost to undertake a project or produce a good, used for budgeting and planning purposes.

Ending Inventory

The total value of all unsold goods remaining at the end of an accounting period, calculated for cost of goods sold reporting.