The Phone Bill for a Company Consists of Both Fixed

question 117

Multiple Choice

The phone bill for a company consists of both fixed and variable costs. Refer to the four-month data below and apply the high-low method to answer the question.
- $$\begin{array} { | l | r | r | } \hline & \text { Minutes } & \text { Total Bill } \\\hline \text { January } & 460 & \$ 3000 \\\hline \text { February } & 200 & \$ 2675 \\\hline \text { March } & 170 & \$ 2660 \\\hline \text { April } & 310 & \$ 2825 \\\hline\end{array}$$ What is the variable cost per minute? (Round your answer to the nearest cent.)

• A) $1.17
• B) $6.52
• C) $0.85
• D) $0.11

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Definitions:

Common Stock

A form of corporate equity ownership, representing a share in the ownership of a company and a claim on a part of its profits.

Treasury Bills

Treasury bills are short-term government securities issued at a discount from the face value and mature at par, used by governments to raise funds to meet short-term financial needs.

Unsystematic Risk

The risk that is unique to a specific company or industry, which can be mitigated through diversification.