Required: A. Calculate the variable and fixed components of the utilities cost. B. Using the data calculated above, estimate the utilities cost for August.

Managerial Accounting: The Cornerstone of Business Decision-Making
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Chapter3: Cost Behavior And Cost Forecasting
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Problem 54E: Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects...
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Lichtenstein Imports needs to determine the variable utilities rate per machine hour in order to estimate cost for August. Relevant
information is as follows.
Machine Hours
Month
Worked
Utilities Cost
April
Мay
5,650
5,200
7,500
9,000
10,060
9,940
11,725
13,400
June
July
Lichtenstein anticipates producing 6,000 units in August, each unit requiring 2.5 hours of machine time. The company uses the high-
low method to analyze costs.
Required:
A. Calculate the variable and fixed components of the utilities cost.
B. Using the data calculated above, estimate the utilities cost for August.
For all requirements, round "variable cost per hour" to 2 decimal places and final answers to the nearest dollar amount.
A. Variable cost per hour
$
0.91
Fixed cost
$
4,355
B. Total variable cost
Total fixed cost
Total utilities cost for August
Transcribed Image Text:Lichtenstein Imports needs to determine the variable utilities rate per machine hour in order to estimate cost for August. Relevant information is as follows. Machine Hours Month Worked Utilities Cost April Мay 5,650 5,200 7,500 9,000 10,060 9,940 11,725 13,400 June July Lichtenstein anticipates producing 6,000 units in August, each unit requiring 2.5 hours of machine time. The company uses the high- low method to analyze costs. Required: A. Calculate the variable and fixed components of the utilities cost. B. Using the data calculated above, estimate the utilities cost for August. For all requirements, round "variable cost per hour" to 2 decimal places and final answers to the nearest dollar amount. A. Variable cost per hour $ 0.91 Fixed cost $ 4,355 B. Total variable cost Total fixed cost Total utilities cost for August
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