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Given the Following Cost and Activity Observations for Notwen Company's

question 152

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Given the following cost and activity observations for Notwen Company's maintenance costs,use the high-low method to calculate Notwen's monthly fixed costs for maintenance.  Cost  Units Produced  January $130,00025,000 February 180,50035,000 March 151,10028,000\begin{array} { c c r } & \text { Cost } & \text { Units Produced } \\\text { January } & \$ 130,000 & 25,000 \\\text { February } & 180,500 & 35,000 \\\text { March } & 151,100 & 28,000 \\\end{array}

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Definitions:

Restricted Fund Method

An accounting approach used for reporting where resources are segregated based on restrictions or designations imposed by donors or regulators.

Deferral Method

An accounting practice where certain revenues and expenses are deferred to future accounting periods, rather than being recognized immediately.

Encumbrance System

A financial accounting system used primarily by governments that tracks commitments made against funds before they are actually spent, ensuring that appropriations are not exceeded.

Expenditure Basis

An accounting method where expenses are recognized and recorded at the point when the obligation is incurred.

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