Required: 1. What is the cost equation for maintenance costs using the high-low method? (Round "slope (unit variable cost)" to 2 decimal places. Negative amounts should be indicated by a minus sign.)
Required: 1. What is the cost equation for maintenance costs using the high-low method? (Round "slope (unit variable cost)" to 2 decimal places. Negative amounts should be indicated by a minus sign.)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter5: Product And Service Costing: Job-order System
Section: Chapter Questions
Problem 27P: Firenza Company manufactures specialty tools to customer order. Budgeted overhead for the coming...
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Transcribed Image Text:Albedo Incorporated manufactures high-end replacement telescope lenses for amateur and professional
astronomers who are seeking to upgrade the performance of their telescopes. You have just become employed as
a staff accountant at Albedo, and Jordan Coleman, the controller, has asked you to help with maintenance cost
estimation for the lens manufacturing process. You review the manufacturing process and decide that the best
cost driver for maintenance costs is machine hours. The data below are from the previous fiscal year for
maintenance costs and machine hours:
Month Maintenance Costs Machine Hours
$ 3,210
4,650
5,175
3,350
3,100
1
2
3
4
5
6
7
8
9
10
11
12
2,950
2,900
2,900
4,120
4,350
3,500
3,775
2,750
3,900
4,050
2,690
2,500
2,580
2,300
2,500
3,160
3,325
2,780
3,000
Required:
1. What is the cost equation for maintenance costs using the high-low method? (Round "slope (unit variable cost)"
to 2 decimal places. Negative amounts should be indicated by a minus sign.)
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