Electrical costs at one of Finfrock Corporation's factories are listed below: Machine-Hours Electrical CostMarch3,642 $40,537April3,616 $40,319May3,667 $40,706June3,634 $40,462July3,665 $40,703August3,659 $40,680September3,644 $40,547October3,612 $40,268November3,624 $40,364 Management believes that electrical cost is a mixed cost that depends on machine-hours. Use the high-low method to estimate the variable and fixed components of this cost. Compute the variable component first, rounding off to the nearest whole cent. Then compute the fixed component, rounding off to the nearest whole dollar. Those estimates are closest to:
A. $11.13 per machine-hour; $40,510 per month
B. $9.61 per machine-hour; $5,533 per month
C. $7.96 per machine-hour; $11,517 per month
D. $0.13 per machine-hour; $40,246 per month
Answer: C
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