Answer the Following Questions Using the Information Below:
the Mildura

question 145

Multiple Choice

Answer the following questions using the information below:
The Mildura Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable.Mildura Company has heard about a method of measuring cost functions called the 'high-low method' and has decided to use it in this situation.
$$\begin{array} { r r } \text { Cost } & \text { Hours } \\\$ 24900 & 5250 \\24000 & 5500 \\36400 & 7500 \\44160 & 9750 \\45000 & 9500\end{array}$$
-What is the estimated total cost at an operating level of 8000 hours?

• A)$43 740
• B)$36 670
• C)$37 125
• D)$46 875

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Definitions:

Equivalent Units

A concept used in cost accounting to convert partially completed goods into the equivalent of fully completed units.

First-in

A term often used in inventory management that refers to goods sold or used in the same order as they were bought or produced.

Materials

The unprocessed materials and parts employed in goods manufacturing.

Equivalent Units

A method used in cost accounting to express the amount of work done on incomplete units in terms of fully completed units.