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How do calculate the fixed cost of maintenance

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Reference no: EM132676747

Andover Company makes weather balloons. The company controller wanted to calculate the fixed and variable costs associated with the maintenance costs incurred by the factory. Data for the past six months were collected.

Month           Maintenance cost          Machine hours

January                    $10,120                    526

February                     9,560                     389

March                         9,712                      412

April                           10,460                    569

May                              10,226                     541

June                             9,686                     399

Required:

A. Using the high-low method, calculate the fixed cost of maintenance and the variable rate per machine hour.

B. Using the high-low method, construct the cost formula for the total maintenance cost.

C. Calculate the budgeted cost for maintenance assuming that 485 hours are worked next month.

Reference no: EM132676747

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