Determining Variable Costs Using the High-Low Method
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Rooter's Cleaning Services provided data concerning the costs incurred to clean hotel rooms for which hotel customers pay $150 per night. Data for the past 7 months are as follows:
January February March April May June July
Number of rooms cleaned 250 160 200 150 270 170 260
Cleaning cost $6,450 $4,060 $5,100 $4,100 $6,760 $4,200 $6,530
How much are estimated monthly variable costs using the high-low method?
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Solution Summary
This solution illustrates how to compute variable costs per unit per month using the high-low method.
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