High Low Method
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Cosco, Inc. has accumulated the following data for the cost of maintenance on its machinery for the last four months:
Month Maintenance Cost Machine Hours
September 26,020 21,000
October 24,600 18,500
November 22,300 15,000
December 25,100 19,000.
Assume that the relevant range includes all of the activity levels mentioned in this problem
Reference: 5-6
Assuming Cosco Company uses the high-low method of analysis, the fixed cost of maintenance would be estimated to be?
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Solution Summary
The solution explains the use of high low method to calculate the fixed cost.
Solution Preview
We first find the cost function by taking the high and low costs .
High - 26,020 hours 21,000
Low - 22,300 hours ...
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