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

question 107

Multiple Choice

Given the following cost and activity observations for Taco Company's utilities, use the high-low method to calculate Taco's variable utilities costs per machine hour.

• A) $10.00
• B) $.60
• C) $.40
• D) $.52

---

Definitions:

Nominal Interest Rate

The rate of interest before adjustment for inflation, representing the face value of borrowing or lending.

Interest Rate

An interest rate is the percentage at which interest is paid by borrowers for the use of money that they borrow from a lender.

Strip Bond

A debt security that is derived from the coupon and principal payments of a bond, which are separated ("stripped") and sold as individual zero-coupon bonds.

Compounded Semi-Annually

Interest calculated on the principal and previously earned interest twice a year.