Problem
Maintenance costs at Planet Corporation factory are listed below:
|
Machine-Hours
|
Maintenance Cost
|
|
April
|
3,135
|
$48,340
|
|
May
|
3,095
|
$47,993
|
|
June
|
3,133
|
$48,345
|
|
July
|
3,157
|
$48,548
|
|
September
|
3,065
|
$47,733
|
|
October
|
3,084
|
$47,880
|
|
November
|
3,125
|
$48,247
|
|
December
|
3,098
|
$48,014
|
Management believes that maintenance cost is a mixed cost that depends on machine-hours.
Use the high-low method to estimate the variable and fixed components of this cost.
What is the variable cost per unit?
What is the fixed cost?