forecast its total overhead cost. The actual machine hours
and total
overhead cost are presented below for the past six months.
MONTH TOTAL O/H MACHINE HOURS
Jan $ 8,258 2,134
Feb 8,006 2,045
Mar 8,387 2,276
Apr 8,832 2,743
May 8,921 2,834
June 7,841 2,034
Using the high-low method, unit variable overhead cost is
calculated to be:
Student Answer: $1.35.
$1.15
$1.40.
$1.65.
$1.25.