What the cost formula for utility cost is

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Reference no: EM132556200

The following data pertains to activity and utility cost for two recent periods:

Activity level (units)           8,000                 5,000

Utility cost                        $8,000                $6,500

Question 1: Utility cost is a mixed cost with both fixed and variable components. Using the high-low method, the cost formula for utility cost is:

Y = $1.00 X

Y = $1.25 X

Y = $4,000 + $0.50 X

Y = $1,500 + $1.25 X

Reference no: EM132556200

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