Fixed costs remain constant at $400,000 per month. During highminusoutput months variable costs are $320,000, and during lowminusoutput months variable costs are $80,000. What are the respective high and low indirectminuscost rates if budgeted professional laborminushours are 16,000 for highminusoutput months and 4,000 for lowminusoutput months? A. $45.00 per hour; $45.00 per hour B. $45.00 per hour; $120.00 per hour C. $25.00 per hour; $20.00 per hour D. $56.20 per hour; $120.00 per hour

Question

Business

Bradley Coleman

10 September, 16:02

Fixed costs remain constant at $400,000 per month. During highminusoutput months variable costs are $320,000, and during lowminusoutput months variable costs are $80,000. What are the respective high and low indirectminuscost rates if budgeted professional laborminushours are 16,000 for highminusoutput months and 4,000 for lowminusoutput months? A. $45.00 per hour; $45.00 per hour B. $45.00 per hour; $120.00 per hour C. $25.00 per hour; $20.00 per hour D. $56.20 per hour; $120.00 per hour

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Answers (1)

Know the Answer?

Kenya Gray · Answer 1

The answer is B. $45.00 per hour; $120.00 per hour

Explanation:

highminusoutput

Fixed costs 400000/16000 = $25

variable costs 320000/16000 = $20

Total = $45

lowminusoutput

Fixed costs 400000/4000 = $100

variable costs 80000/4000 = $20

Total = $120