Using the High-Low Method,the Utilities Cost Associated with 980 Machine

question 58

Multiple Choice

Using the high-low method,the utilities cost associated with 980 machine hours would be:

• A)$9,510.
• B)$9,660.
• C)$9,700.
• D)$9,790.
• E)an amount other than those listed abovE.

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Definitions:

Fixed Manufacturing Overhead

Indirect manufacturing costs that do not vary with production volume, such as salaries of managers, rent, and utility expenses.

Labor-Hours

A measure of the amount of work effort measured in hours, often used in tracking productivity and calculating labor costs.

Predetermined Overhead Rate

An estimated overhead rate used in costing to assign indirect costs to products or services based on an activity measure, recalculated for emphasis.

Machine-Hours

A unit of measure for the total operational time of machines within a manufacturing or production process.