[ashleystaks]

For my online accounting homework, I am supposed to use the high-low method to get the cost per activity equation. The information I'm given is:

Level of Activity

_______Direct Labor hours____________Total Factory overhead costs (in yen)
Low _______74,400 ________________________ ¥317,440
High ______ 99,200 ________________________ ¥369,520


I keep getting 2.1 as the slope, but it says that it's not the correct answer. Do you know how to solve it or why I'm not getting the right answer? (or what the answer is)
Thanks

[rehmanvohra]

The slope of 2.10 represents variable cost per labor hour. Now you mus also find the fixed costs included in the total costs, as follows:
Total costs for 74,400 labor hours 317,440
Less: Variable costs 74,400 x 2.10 156,240
Fixed costs = 161,200