Harry began his analysis of repairing costs by collecting cost and activity data for a number of recent months. Those data are displayed below: Month Activity Level Repairing cost Days Cost Incurred January 1,750 $14,100 February 1,944 $15,150 March 1,400 $13,900 April 1,600 $14,000 May 1,500 $14,300 June 1,270 $12,100 July 2,270 $19,150 August 1,500 $14,600 Required: i. Using the high-low method, estimate the fixed cost of repairing cost per month and the variable cost of repairing per activity level. Round off the fixed cost to the nearest whole dollar and the variable cost to the nearest whole cent. ii. Express the fixed and variable components as a cost formula in the equation form.
Harry began his analysis of repairing costs by collecting cost and activity data for a number of recent months. Those data are displayed below: Month Activity Level Repairing cost Days Cost Incurred January 1,750 $14,100 February 1,944 $15,150 March 1,400 $13,900 April 1,600 $14,000 May 1,500 $14,300 June 1,270 $12,100 July 2,270 $19,150 August 1,500 $14,600 Required: i. Using the high-low method, estimate the fixed cost of repairing cost per month and the variable cost of repairing per activity level. Round off the fixed cost to the nearest whole dollar and the variable cost to the nearest whole cent. ii. Express the fixed and variable components as a cost formula in the equation form.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Harry began his analysis of repairing costs by collecting cost and activity data for a number of
recent months. Those data are displayed below:
Month Activity
Level
Repairing cost
Days Cost Incurred
January 1,750 $14,100
February 1,944 $15,150
March 1,400 $13,900
April 1,600 $14,000
May 1,500 $14,300
June 1,270 $12,100
July 2,270 $19,150
August 1,500 $14,600
Required:
i. Using the high-low method, estimate the fixed cost of repairing cost per month and the
variable cost of repairing per activity level. Round off the fixed cost to the nearest whole
dollar and the variable cost to the nearest whole cent.
ii. Express the fixed and variable components as a cost formula in the equation form.
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