Strawser Company Is Developing a Cost Function for Its Maintenance

question 102

Essay

Strawser Company is developing a cost function for its maintenance costs using the high-low method. The following data have been collected for the past year:
Direct Labour Maintenance
Quarter Hours Costs Incurred
1 5,000 $ 745
2 6,500 820
3 7,000 850
4 8,000 1,000
Calculate the following amounts:
a)The variable cost per direct labour hour
b)The fixed cost
c)The estimated total cost for 9,000 direct labour hours
d)The estimated total cost for 6,000 direct labour hours

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Definitions:

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The difference in price between two related goods, markets, or levels of supply chain.

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