Lichtenstein Imports Needs to Determine the Variable Utilities Rate Per

question 5

Essay

Lichtenstein Imports needs to determine the variable utilities rate per machine hour in order to estimate cost for August. Relevant information is as follows.

Lichtenstein anticipates producing 5,000 units in August, each unit requiring 1.5 hours of machine time. The company uses the high-low method to analyze costs.
Required:
A. Calculate the variable and fixed components of the utilities cost.
B. Using the data calculated above, estimate the utilities cost for August.
C. Compare the high-low method versus the visual-fit method with respect to (1) number of data observations used in the analysis and (2) objectivity of the results.

---

Definitions:

Digitally Remove

The act of physically extracting something with one's fingers, especially in a medical or surgical context.

Glaucoma

Abnormal condition of elevated pressure within an eye caused by obstruction of the outflow of aqueous humor. If untreated, it often results in peripheral visual loss, decreased visual acuity with difficulty adapting to darkness, and a halo effect around lights.

Myocardial Infarction

A medical condition more commonly known as a heart attack, occurring when blood flow to a part of the heart is blocked for a long enough time that part of the heart muscle is damaged or dies.

Normal Saline Enema

A type of enema utilizing a solution of sodium chloride in water, used to cleanse the lower bowel or treat mild dehydration.