Using the High-Low Method and the Information Below,compute the Monthly

question 69

Multiple Choice

Using the high-low method and the information below,compute the monthly total fixed costs for SKP Corporation. $$\begin{array} { l cc } \text { Month } & \text { TelephoneHours Used } & \text { Telephone Expense: } \\\text { April } & 100 & \$ 4,500 \\\text { May } & 110 & 4,800 \\\text { June } & 150 & 5,400\end{array}$$

• A) $1,800
• B) $2,700
• C) $3,640
• D) $4,500

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Definitions:

Period

A specific timeframe for which financial statements are prepared or accounting transactions are evaluated.

Raw Materials Inventory Turnover

A ratio showing how many times a company’s raw materials inventory is used and replenished over a specific period.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a specific period, indicating efficiency in sales and inventory management.

Compute

To calculate or process using a computer or mathematical operations.