Moresan Co

question 161

Essay

Moresan Co. 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:

Output Rises

Refers to an increase in the production level of goods and services over a certain period.

Output Rises

An increase in the production of goods and services within an economy.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service relative to its market price.

Units

A standard measurement for quantity used to quantify material amount or the extent of something.