You Have Calculated,using the High-Low Method,a Variable Cost Per Machine

question 116

Multiple Choice

You have calculated,using the high-low method,a variable cost per machine hour of $0.80 for your production power costs.Power costs at 6,000 machine hours are $5,400;at 9,000 machine hours,they are $7,800.What are the total fixed costs that you would use to estimate production power costs for your company at any level within your relevant range?

• A)$600
• B)$6,400
• C)$2,400
• D)$4,800

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Definitions:

Bell-Shaped-Curve

A graphical representation of a normal distribution in statistics, where the apex represents the highest point or the mean, and the curve tapers equally on both sides.

Market Structures

The classification of markets based on the competition level and the nature of product differentiation among firms within an industry.

Retained Earnings

are the portion of a company's profits that are held back and not distributed to shareholders as dividends, often reinvested in the business.

R&D

Short for Research and Development, it refers to the activities undertaken by companies or governments in the innovation and improvement of products and technologies.