Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
6th Edition
ISBN: 9780134486857
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 20, Problem 23E
The manager of Trusty Car Inspection reviewed the monthly operating costs for the past year. The costs ranged from $4,300 for 1,300 inspections to $3,900 for 900 inspections.
Requirements
- 1. Use the high-low method to calculate the variable cost per inspection.
- 2. Calculate the total fixed costs.
- 3. Write the equation and calculate the operating costs for 1,000 inspections.
- 4. Draw a graph illustrating the total cost under this plan. Label the axes, and show the costs at 900, 1,000, and 1,300 inspections.
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The manager of Trusty Car Inspection reviewed the monthly operating costs for the past year. The costs ranged from $4,300 for 1,300 inspections to $3,900 for 900 inspections.
Requirements 1. Use the high-low method to calculate the variable cost per inspection. 2. Calculate the total fixed costs. 3. Write the equation and calculate the operating costs for 1,000 inspections. 4. Draw a graph illustrating the total cost under this plan. Label the axes, and show the costs at 900, 1,000, and 1,300 inspections.
Write a linear cost function equation for each of the following conditions. Use y for estimated costsand X for activity of the cost driver.
Machine operating costs include $1,000 of maintenance per month, and $15.00 of coolant usagecosts for each day the machinery is in operation.
Joha, an accountant for Jones, Inc., has decided to estimate the fixed and variable components associated with the company's repair activity. The following data for the past few months has been collected:
Repair Hours
Total Repair Costs
20
$ 1,000
25
1,250
30
1,400
40
1,550
Required:
Estimate the fixed and variable components for the repair costs using the high-low method. Using the cost formula, predict the total cost of repair if 10 hours are used.
Chapter 20 Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
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