Cost estimation: High-low method (LO3). Ginsburg and Company provide you with the following data: MonthSupervision...
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Cost estimation: High-low method (LO3). Ginsburg and Company provide you with the following data:
MonthSupervision CostLabor HoursMachine Hours
January$27,5002,4005,040
February$27,5002,5605,300
March$32,5403,3606,600
April$30,0002,8806,500
May$32,6303,3006,750
Required:a.Use the high-low method to estimate Ginsburg's monthly fixed supervision cost and the cost per labor hour. (i.e., assume Ginsburg uses labor hours as its measure of activity). b. Use the high-low method to estimate Ginsburg's monthly fixed supervision cost and the cost per machine hour (i.e., assume Ginsburg uses machine hours as its measure of activity). c.Which of the two estimates, the answer to question (a) or question (b), is likely to be more representative of actual cost behavior?
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