Gribble Company's High and Low Level of Activity Last Year

question 122

Multiple Choice

Gribble Company's high and low level of activity last year was 60000 units of product produced in May and 20000 units produced in November. Machine maintenance costs were $156000 in May and $60000 in November. Using the high-low method determine an estimate of total maintenance cost for a month in which production is expected to be 45000 units.

• A) $135000
• B) $144000
• C) $117000
• D) $120000

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Definitions:

Interest Rate

The rate at which a borrower pays interest to a lender for borrowing money.

Government Securities

Financial instruments issued by a government to borrow money from investors, including bonds, notes, and bills, usually considered low-risk investments.

Money Supply

The full volume of monetary holdings in an economy, including cash, coins, and the deposits in checking and saving accounts, at a given point.

Actual Reserves

The total amount of funds that a bank has in its reserve account plus any cash on hand, used to satisfy reserve requirements.