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Question - JK have been assigned to work on an analysis between fixed and variable costs in his department. The power cost does not seem to fit into either category easily. The following details are as follows:
WEEK
POWER COST
# MACHINEHOURS
1
3,600
8,000
2
3,950
9,000
3
3,050
6,500
4
3,380
7,400
5
3,870
8,600
6
4,020
8,900
7
2,095
3,700
Required -
1. Separate the cost (Fixed and Variable), finding the closest estimate of the elements using the high and low point method.
2. Estimate the total cost likely in week eight (8) if the expected level of machine hour is 18,000.
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