Jackson, Inc

Multiple Choice

Jackson, Inc.is preparing a budget for the coming year and requires a breakdown of the cost of electrical power used in its factory into the fixed and variable elements.The following data on the cost of power used and direct labor hours worked are available for the last six months of this year: Assuming that Jackson uses the high-low method of analysis, the estimated variable cost of steam per direct labor hour is:

A) $4.00.
B) $5.42.
C) $5.82.
D) $6.00.