Reference: 06-07
Gargymal Company Would Like to Estimate the Variable

Multiple Choice

Reference: 06-07
Gargymal Company would like to estimate the variable and fixed components of its electrical costs and has compiled the following data for the last five months of operations. $$\begin{array} { | l | l | l | } \hline & \text { Machine Hours } & \text { Electrical Cost } \\\hline \text { August } & 1,000 & \$ 1,550 \\\hline \text { September } & 900 & 1,510 \\\hline \text { October } & 1,500 & 1,750 \\\hline \text { November } & 2,000 & 1,950 \\\hline \text { December } & 1,300 & 1,670 \\\hline\end{array}$$
-Using the high-low method of analysis, the estimated variable cost per machine hour for electricity is closest to?

A) $0.98.
B) $1.68.
C) $0.40.
D) $2.50.