Managerial Accounting

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High Low Method Estimate Utilities Cost


The following information is available for a company's utility cost for operating its machines for the first four months of the year:

Utility Costs for Operating Machines:
Month Machine Hours Utility Costs
January 900 \$5,450
February 1,800 \$6,900
March 2,400 \$8100
April 600 \$3,600

Using the high-low method, what is the estimated variable cost per machine hour for utilities ?