Nielsen Company Gathered the Following Information on Power Costs and Factory

question 93

Essay

Nielsen Company gathered the following information on power costs and factory machine usage for the last six months:
Instructions
Using the high-low method of analyzing costs, answer the following questions and show computations to support your answers.
(a) What is the estimated variable portion of power costs per factory machine hour?
(b) What is the estimated fixed power cost each month?
(c) If it is estimated that 10,000 factory machine hours will be run in July, what is the expected total power cost for July?

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Definitions:

CPI

A gauge called the Consumer Price Index assesses the weighted average price shifts in a collection of consumer products and services, encompassing areas like food, healthcare, and transportation.

Economists

Professionals who study the production, distribution, and consumption of goods and services, often focusing on research, analysis, and the development of economic theories.

Quality Changes

Alterations in the features, specifications, or performance of goods and services, often impacting their perceived value or utility.

Bureau of Labor Statistics

An agency of the United States Department of Labor, responsible for measuring labor market activity, working conditions, and price changes in the economy.