Understanding of the behavior of its inspection costs

Assignment Help Accounting Basics

Reference no: EM131067425

The management of Harrigill Corporation would like to have a better understanding of the behavior of its inspection costs. The company has provided the following data:

	Direct Labor-Hours	Inspection Cost
March	5,650	$ 54,600
April	5,641	$ 54,473
May	5,679	$ 54,575
June	5,673	$ 54,461
July	5,633	$ 54,246
August	5,593	$ 54,028
September	5,690	$ 54,979
October	5,639	$ 54,484
November	5,256	$ 52,493

Management believes that inspection cost is a mixed cost that depends on direct labor-hours.

Required:

Estimate the variable cost per direct labor-hour and the fixed cost per month using the high-low method. (Do not round intermediate calculations. Round your final answers to two decimal places.)


Variable cost per direct labor-hour	$
Fixed cost per month	$

Reference no: EM131067425

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