The phone bill for a corporation consists of both fixed and variable costs
Refer to the four-month data below and apply the high-low method to answer the question.
Minutes Total Bill
January 460 $4,000
February 210 $2,695
March 170 $2,640
April 300 $2,835
If the company uses 390 minutes in May, how much will the total bill be? (Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar.)
A) $1,842.60
B) $1,829.10
C) $3,672
D) $6,157
C .C)
Change in total cost ($4,000 - $2,640 ) $1,360
Change in minutes (460 — 170 ) 290
Variable cost per minute ($1,360 / 290 ) 4.69
Variable cost for January = 460 minutes x $4.69 per minute = $2,157.40
Total fixed costs = Total mixed cost - Total variable cost
Total fixed costs = $4,000 - $2,157.40 = $1,842.60
For 390 minutes:
Total cost = (390 minutes x 4.69 ) + $1,842.60
Total cost = $1,829.10 + $1,842.60 = $3,672
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