Sweetland Company, Which Uses the High-Low Method to Analyze Cost

question 55

Multiple Choice

Sweetland Company, which uses the high-low method to analyze cost behaviour, has determined that machine hours best explain the company's utilities cost. The company's relevant range of activity varies from a low of 700 machine hours to a high of 1,200 machine hours, with the following data being available for the first six months of the year: $\begin{array} { | l | r | r | } \hline { \text { Month } } & \text { Utilities } & \text { Machine Hours } \\\hline \text { January } & \$ 8,900 & 800 \\\text { February } & \$ 8,560 & 720 \\\text { March } & \$ 9,150 & \$ 10 \\\text { April } & \$ 9,560 & 920 \\\text { May } & \$ 9,825 & 950 \\\text { June } & \$ 9,350 & 900 \\\hline\end{array}$ The variable utilities cost per machine hour is:

• A)$0.18.
• B)$1.33.
• C)$2.53.
• D)$2.94.
• E)$5.50.

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Definitions:

Stock Dividends

A dividend payment made in the form of additional shares rather than a cash payout, increasing the number of shares owned.

Common Shares Issued

Refers to the number of shares that have been allocated to shareholders as part of a company's capital stock.

Market Price

The current price at which a particular security, commodity, or asset can be bought or sold on the market.

Comprehensive Income

The total change in equity for a reporting period, including all revenues, gains, expenses, and losses.