Author Question: Taunton Company uses the high-low method to estimate its cost function. The information for 2017 is ... (Read 79 times)

luvbio · **on:** Mar 6, 2021

Question 1

Quantum Company uses the high-low method to estimate the cost function. The information for 2017 is provided below:

Machine-hours

Labor Costs

Highest observation of cost driver

900

$36,000

Lowest observation of cost driver

100

$14,000

What is the estimated total cost when 450 machine-hours are used?
◦ $63,000
◦ $32,000
◦ $18,000
◦ $23,625

Question 2

Taunton Company uses the high-low method to estimate its cost function. The information for 2017 is provided below:

Machine-hours

Costs

Highest observation of cost driver 3,000 $345,000
Lowest observation of cost driver 2,500 $315,000

What is the slope coefficient?
◦ $115.00
◦ $126.00
◦ $60.00
◦ $120.00

joewallace · **Reply #1 on:** Mar 6, 2021

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