Question - Nutt industries electricity costs and machine hours over a six month period Follow.
|
|
Machine Hours
|
Electricity Costs
|
|
January
|
2,000
|
4,800
|
|
February
|
2,500
|
5,200
|
|
March
|
3,000
|
5,400
|
|
April
|
2,400
|
5,000
|
|
May
|
2,800
|
5,600
|
|
June
|
2,200
|
5,000
|
Using the high Low method, what is the formula that can be used to estimate electricity costs at different levels of volume?
a. Electricity costs = $2,800 + ($1.00 x number of machine hours)
b. Electricity costs = $2,600 + ($1.00 x number of machine hours)
c. Electricity costs = $400 + ($1.67 x number of machine hours)
d. Electricity costs = $3,600 + ($.60 x number of machine hours)