The Longreach Toy Factory Has Determined Machine Hours to Be

question 46

Multiple Choice

The Longreach Toy Factory has determined machine hours to be the cost driver of the company's electricity costs.During the first six months of the year,the company incurred the following electricity costs:
Using the high-low method,estimate the variable cost per machine hour:

• A) $8.38
• B) $7.44
• C) $5.50
• D) None of the given answers

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Definitions:

COGS

Acronym for Cost of Goods Sold, which refers to the direct costs attributable to the production of the goods sold by a company.

Inventory Turnover Rate

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

Cost of Goods Sold

The direct expenses related to the creation of products sold by a business, including costs for materials and labor.

Sales

Revenue generated from the selling of goods or services within a specific period.