2024 – 1 Given the following cost and activity observations for Leno Enterprises utilities use the high low method to

1. Given the following cost and activity observations for Leno Enterprises’ utilities, use the high-low method to calculate Leno’s variable utilities cost per machine hour.

	Cost	Machine Hours
September	$4,100	22,000
October	3,700	18,000
November	3,900	19,000
December	4,500	28,000

A) $0.08
B) $4.86
C) $0.25
D) $12.50

2. You have calculated, using the high-low method, a variable cost per machine hour of $0.80 for your production power costs. Power costs at 6,000 machine hours are $5,400; at 9,000 machine hours, they are $7,800. What are the total fixed costs that you would use to estimate production power costs for your company at any level within your relevant range?
A) $600
B) $6,400
C) $2,400
D) $4,800

3. Given the following cost and activity observations for Notwen Company’s maintenance costs, use the high-low method to calculate Notwen’s monthly fixed costs for maintenance.

	Cost	Units Produced
January	$130,000	25,000
February	180,500	35,000
March	151,100	28,000

A) $11,250
B) $4,550
C) $3,750
D) $2,650

4. Dapper Hat Makers is in the business of designing and producing specialty hats. The material used for derbies costs $4.50 per unit, and Dapper pays each of its two full-time employees $250 per week. If the employees make 50 derbies in one week, what is the fixed cost per derby? (Round to two decimal places where necessary.)
A) $4.50
B) $5.00
C) $10.00