Continuation of E6-46B: High-low method (Learning Objective 4)
Refer to Lotta’s Fourth Street Floral data in E6-46B. Use the high-low method to determine the company’s cost equation for van operating costs. Use your results to predict van operating costs at a volume of 15,500 miles.
Tammy Lotta, owner of Fourth Street Floral, operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a flat delivery fee, Lotta wants to set the delivery fee based on the distance driven to deliver the flowers. Lotta wants to separate the fixed and variable portions of her van operating costs so that she has a better idea of how delivery distance affects these costs. She has the following data from the past seven months:
Month | Miles Driven | Van Operating Costs |
January | 15,800 | $5,460 |
February | 17,300 | $5,680 |
March | 14,600 | $4,940 |
April | 16,000 | $5,310 |
May | 17,100 | $5,830 |
June | 15,400 | $5,420 |
July | 14,100 | $4,880 |
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Managerial Accounting (5th Edition)
- BE5.7 - Using Excel to Determine Profitability Given a Constrained Resource Student Work Area PROBLEM Required: Provide input into cells shaded in yellow in this template. Input the required mathematical formulas or functions with cell references to the Problem area or work area as indicated. Rachel wants to use her knitting skills to make a little extra money so she can enjoy a theatre weekend with her besties. She’s got the pattern down for a hat, scarf, and mittens, but she realizes that her available time is limited. She should be able to sell as many of any item as she can make, but she wants to make sure she’s making the best use of her time. Cost and time information are provided here. Calculate the contribution margin per unit of the scarce resource for each item. Hat Scarf Mittens Hat Scarf Mittens Contribution margin per Time in minutes 20 30…arrow_forwardTechPro offers instructional courses in e-commerce website design. The company holds classes in a building that it owns. Identify each of TechPro’s costs below as (a) variable or fixed and (b) direct or indirect by selecting the appropriate dropdowns. Assume the cost object is an individual class. Variable or Fixed Direct or Indirect 1. Instructional manuals for students 2. Advertising Fixed Indirect 3. Salesperson salary 4. Sales commissions 5. Computer printer ink 6. Depreciation on classroom buildingarrow_forwardE-LEARNING COST ACCOUNTING ASSIGNMENT Answer all the THREE Questions. 1 Mr Gardens, the financial controller of Sugarland Ltd, accidentally tossed the company's cost records into a wastebasket which had been light .On realising that mistake, he rushed to the roaring blaze and managed to retrieve only a few of the records. From the salvaged records, he managed to determine the following facts about the current year 2020: (i) Sales totaled sh 1,000,000 during 2020. (ii) The beginning inventories for the year were: work in progress sh 120,000; Finished goods sh 60,000. (iii) There were no closing inventories of raw materials. (iv) Direct labor is equal to 25% of conversion cost; direct, labor is also equal to 40% of prime cost. (v) The work in progress inventory decreased by sh 20,000 during the year. (vi)Gross margin during the year was 55% of sales. (vii) Manufacturing overheads amounted to sh 240,000 in the year. (iv) Administrative expenses for 2014 were twice as great as net income…arrow_forward
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