Exhibit 5-4 Wayside Company Has Machine Hours of 5,000 and Machine Costs

question 44

Multiple Choice

Exhibit 5-4
Wayside Company has machine hours of 5,000 and machine costs of $170,000 at the high data point.Machine hours are 2,000 and machine costs are $110,000 at the low data point.Wayside uses the high-low method to estimate costs.
-Refer to Exhibit 5-4.What is the estimate of total machine costs at Wayside when 3,700 machine hours are used?

• A)$144,000
• B)$70,000
• C)$140,000
• D)$74,000
• E)None of the answer choices is correct.

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Definitions:

Net Purchases

Net purchases are the total amount of purchases made by a business after subtracting returns, allowances, and discounts.

Cash Conversion Cycle

A measurement that calculates the duration required for a business to transform its inventory investments and additional resources into cash flows resulting from sales.

Accounts Receivable

Money owed to a business by its customers for goods or services provided on credit.

Accounts Payable

Accounts payable are amounts a company owes to suppliers for items or services purchased on credit; it is a current liability on the balance sheet.