Lewisa Company Needs to Determine the Variable Utilities Rate Per

question 31

Essay

Lewisa Company needs to determine the variable utilities rate per machine hour in order to estimate cost for August. Relevant information is as follows. $\begin{array}{llr}& \text { Machine } \\& \text { Hours } & \text { Utilities } \\\text { Month } & \text { Worked } & \text { Cost }\\\text { April } & 4,500 & \$ 9,560 \\\text { May } & 4,200 & 9,440 \\\text { June } & 6,500 & 10,725 \\\text { July } & 7,000 & 11,400\end{array}$
Lewisa anticipates producing 5,000 units in August, each unit requiring 1.5 hours of machine time. The company uses the high-low method to analyze costs.
Required:
A. Calculate the variable and fixed components of the utilities cost.
B. Using the data calculated above, estimate the utilities cost for August.
C. Compare the high-low method versus the visual-fit method with respect to (1) number of data observations used in the analysis and (2) objectivity of the results.

---

Definitions:

Project Plan

A formal, approved document outlining how the project will be executed, monitored, and controlled, including scope, objectives, and timelines.

Knowledge And Skills

The theoretical understanding (knowledge) and practical abilities (skills) that individuals possess, enabling them to perform tasks effectively.

Goals

Goals are specific, measurable targets that individuals or organizations aim to achieve within a designated timeframe.

Anchor Statement

A clear, concise statement used to convey the main idea or goal of a project, anchoring all work and decisions to this central concept.