Accounting 2120 Ch. 20 Cost Volume Profit Analysis Activity 1 6. Fern Company gathered the following information on power costs and factory machine usage for the last five months: Month January February March Power Cost $48,000 41,000 47,000 44,000 40,000 Factory Machine Hours 19,000 15,500 18,500 17,000 15,000 April May Instructions Use the high-low method of analyzing costs to answer the following questions. A. How much is the estimated variable portion of power costs per factory machine hour? B. How much is the estimated fixed power cost each month? C. If it is estimated that 18,000 factory machine hours will be run in June, what is the expected total power costs for June?

Accounting 2120 Ch. 20 Cost Volume Profit Analysis Activity 1 6. Fern Company gathered the following information on power costs and factory machine usage for the last five months: Month January February March Power Cost $48,000 41,000 47,000 44,000 40,000 Factory Machine Hours 19,000 15,500 18,500 17,000 15,000 April May Instructions Use the high-low method of analyzing costs to answer the following questions. A. How much is the estimated variable portion of power costs per factory machine hour? B. How much is the estimated fixed power cost each month? C. If it is estimated that 18,000 factory machine hours will be run in June, what is the expected total power costs for June?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter2: Basic Managerial Accounting Concepts

Section: Chapter Questions

Problem 39E: Cost Classification Loring Company incurred the following costs last year: Required: 1. Classify...

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