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The following data relate to the overhead expenditure of contract cleaners at two activity levels:
square metres cleaned 12,750 15,100
overheads $73,950 $83,585Using the high-low method, what is the estimate of the overhead cost if 16,200 square metres are to be cleaned?
A $88,095
B $89,674
C $93,960
D $98,095Why don’t you watch our free lectures on this?
The lectures are a complete free course for Paper F2 and cover everything needed to be able to pass the exam well.
83585-73950/15100-12750=4.10
fixed cost+(4.10*12750)=73950 or
fixed cost+(4.10*15100)=83585
fixed cost = 21675if activity = 16200
21675+(4.10*16200) = 88095
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