Requirements 1. Using the high-low method, estimate the linear relationship y= a + bx, where y is the total annual operating cost of a helicopter and X is the number of round-trips it makes to JFK airport during the year. 2. Give examples of costs that would be included in a and in b. 3. If Resling Travel expects each helicopter to make, on average, 1,700 round-trips in the coming year, what should be its estimated operating budget for the helicopter fleet? Print Done x

Requirements 1. Using the high-low method, estimate the linear relationship y= a + bx, where y is the total annual operating cost of a helicopter and X is the number of round-trips it makes to JFK airport during the year. 2. Give examples of costs that would be included in a and in b. 3. If Resling Travel expects each helicopter to make, on average, 1,700 round-trips in the coming year, what should be its estimated operating budget for the helicopter fleet? Print Done x

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 6E: Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of...

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Radig Travel offers helicopter service from suburban towns to John F. Kennedy International Airport in New York City. Each of its fourteen helicopters makes between 1,100 and 2,200 round-trips per year. The records indicate that a helicopter that has made 1,100 round-trips in the year incurs an average operating cost of $500 per round-trip, and one that has made 2,200 round-trips in the year incurs an average operating cost of $400 per round-trip. Read the requirements LOADING... . Requirement 1. Using the high-low method, estimate the linear relationship y=a+bX, where y is the total annual operating cost of a helicopter and X is the number of round-trips it makes to JFK airport during the year. = + Requirement 2. Give examples of costs that would be included in a and in b. Begin by selecting which type of costs "a" and "b" represent, then select the costs that correlate with that cost type, use each cost only once.…
Rapp Travel offers helicopter service from suburban towns to John F. Kennedy International Airport in New York City. Each of its nine helicopters makes between 1,200 and 2,400 round-trips per year. The records indicate that a helicopter that has made 1,200 round-trips in the year incurs an average operating cost of $535 per round-trip, and one that has made 2,400 round-trips in the year incurs an average operating cost of $500 per round-trip. Read the requirements. Requirement 1. Using the high-low method, estimate the linear relationship y = a +bX, where y is the total annual operating cost of a helicopter and X is the number of round-trips it makes to JFK airport during the year. = +
Reisen Travel offers helicopter service from suburban towns to John F. Kennedy International Airport in New York City. Each of its 10 helicopters makes between 1,000 and 2,000 round-trips per year. The records indicate that a helicopter that has made 1,000 round-trips in the year incurs an average operating cost of $350 per round-trip, and one that has made 2,000 round-trips in the year incurs an average operating cost of $300 per round-trip. Q.If Reisen Travel expects each helicopter to make, on average, 1,200 round-trips in the coming year, what should its estimated operating budget for the helicopter fleet be?
Reisen Travel offers helicopter service from suburban towns to John F. Kennedy International Airport in New York City. Each of its 10 helicopters makes between 1,000 and 2,000 round-trips per year. The records indicate that a helicopter that has made 1,000 round-trips in the year incurs an average operating cost of $350 per round-trip, and one that has made 2,000 round-trips in the year incurs an average operating cost of $300 per round-trip. Q. Give examples of costs that would be included in a and in b.
Reisen Travel offers helicopter service from suburban towns to John F. Kennedy International Airport in New York City. Each of its 10 helicopters makes between 1,000 and 2,000 round-trips per year. The records indicate that a helicopter that has made 1,000 round-trips in the year incurs an average operating cost of $350 per round-trip, and one that has made 2,000 round-trips in the year incurs an average operating cost of $300 per round-trip. Q. Using the high-low method, estimate the linear relationship y = a + bX, where y is the total annual operating cost of a helicopter and X is the number of round-trips it makes to JFK airport during the year.
JetTaxi is a passenger airplane line that contracts with larger, well-known lines to provide transportation across the United States. JetTaxi owns 30 aircraft, and currently has contracts for 20 of those aircraft. JetTaxi normally charges $2,700,000 each year per jet to provide the carrier services. Each JetTaxi plane incurs yearly costs of $600,000 for labor, $200,000 for fuel, $400,000 in fixed overhead, and $800,000 in variable overhead. JetTaxi is considering a new contract where they would provide 5 airplanes to a new company for $2,000,000 each year per jet. Should JetTaxi accept the contract? Why? Group of answer choices No, because the differential net income would be zero. Yes, because the differential net income would be $1.6M. No, because the differential net income would be - $2M. Yes, because the differential net income would be $2M.
The Metropolitan Bus Company (MBC) purchases diesel fuel from American Petroleum Supply. In addition to the fuel cost, American Petroleum Supply charges MBC $200 per order to cover the expenses of delivering and transferring the fuel to MBC's storage tanks. The lead time for a new shipment from American Petroleum is 10 days; the cost of holding a gallon of fuel in the storage tanks is $0.04 per month, or $0.48 per year; and annual fuel usage is 120,000 gallons. MBC buses operate 300 days a year. What is the optimal order quantity for MBC?Q* = fill in the blank 1 How frequently should MBC order to replenish the gasoline supply?fill in the blank 2 orders per year The MBC storage tanks have a capacity of 15,000 gallons. Should MBC consider expending the capacity of its storage tanks?Metropolitan Bus Company the capacity of its storage tanks. What is the reorder point?r = fill in the blank 4 gallo
Travel offers helicopter service from suburban towns to John F. Kennedy International Airport in New York City. Each of its 10 helicopters makes between 1,000 and 2,000 round-trips per year. The records indicate that a helicopter that has made 1,000 round-trips in the year incurs an average operating cost of $350 per round-trip, and one that has made 2,000 round-trips in the year incurs an average operating cost of $300 per round-trip. Read the requirements LOADING... . Requirement 1. Using the high-low method, estimate the linear relationship y=a+bX, where y is the total annual operating cost of a helicopter and X is the number of round-trips it makes to JFK airport during the year.
Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of$25,750 and is capable of processing as many as 6,500 purchase orders per year. Each clerk usesa PC and laser printer in processing orders. Time available on each PC system is sufficient toprocess 6,500 orders per year. The cost of each PC system is $1,100 per year. In addition to thesalaries, Elliott spends $27,560 for forms, postage, and other supplies (assuming 26,000 purchaseorders are processed). During the year, 25,350 orders were processed.Required:1. Classify the resources associated with purchasing as (1) flexible or (2) committed.2. Compute the total activity availability, and break this into activity usage and unused activity.3. Calculate the total cost of resources supplied (activity cost), and break this into the cost ofactivity used and the cost of unused activity.4. (a) Suppose that a large special order will cause an additional 500 purchase orders. Whatpurchasing costs are…
Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of $25,750 and is capable of processing as many as 6,500 purchase orders per year. Each clerk uses a PC and laser printer in processing orders. Time available on each PC system is sufficient to process 6,500 orders per year. The cost of each PC system is $1,100 per year. In addition to the salaries, Elliott spends $27,560 for forms, postage, and other supplies (assuming 26,000 purchase orders are processed). During the year, 25,350 orders were processed. Required: 1. Which of the resources associated with purchasing can be classified as flexible resources? Forms, Postage and Supplies Which of the resources associated with purchasing can be classified as committed resources? PC system and clerks 2. Compute the total activity availability, and break this into activity usage and unused activity. Activity availability: fill in the blank 3 purchase orders Activity usage: fill in the blank…
Without calculations, determine the contribution margin at the break-even point. Break-even point $
McCafe Inc.has built a separate car parking area having parking space of 1,000 cars.$1/hour is charged for each car as parking fee whereas, the parking area operates for 2,600 hours/year. Normally, customers use the parking area as an average fortwo hours. McCafe has rented this parking area for $7,500/month from a construction company There arefive employees who look after the parking area who are paid for 50 weeks; $350/week. These employees are allowed two-week holidaysand an additional compensation of $600are paidto each employee duringthese holidays. All five employees work during the months when traffic load is high whereas, four employees handle all the matters when traffic load is lesser. The overall workload is managed byaManager who is paid $25,000/year. Maintenance and other operating costs of parking area include fixed costs of $2,500 per month whereas 7cents/parking-space/hour is included in variable cost.Required:(i) Calculate the annual break-even point in dollars (Car…