Introduction To Managerial Accounting
8th Edition
ISBN: 9781259917066
Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.
Publisher: Mcgraw-hill Education,
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Question
Chapter 6.A, Problem 3E
To determine
High-low Method: It is measure of separating the fixed cost and variable cost in the mixed operating cost of the company.
1. The estimated variable operating cost per kilometer and the annual fixed operating cost.
2. Express the variable and fixed cost in the form of
3. If the truck were driven 76,000 kilometers during a year, what total operating cost would you expect to incur.
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Habib transport company Itd, operates a fleet of delivery trucks in Singapore. The Company has determined that if a truck is driven 135,000 kilometers during a year, The average operating cost is 11.8 cent per kilometers. If a truck driven 95,000 kilometers during a year, the average operating cost increases to 13.6 cents per kilometers.
Requirement
a) Using high-low method estimate the variable and fixed costs elements of the annual cost of truck operators.
b) Express the variable and fixed costs in the form y= a +bx
e) if a truck were driven to 100,000 kilometers during a year, what total cost would you expect to be incurred?
Hoi Chong Transport, Limited, operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven
162,000 kilometers during a year, the average operating cost is 13.2 cents per kilometer. If a truck is driven only 108,000 kilometers
during a year, the average operating cost increases to 16.6 cents per kilometer.
Required:
1. Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated with
the fleet of trucks.
2. Express the variable and fixed costs in the form Y = a + bX.
3. If a truck were driven 135,000 kilometers during a year, what total operating cost would you expect to be incurred?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Variable cost
Fixed cost
Required 3
Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated
with the fleet of trucks. (Do not round your…
Hoi Chong Transport, Limited, operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven
105,000 kilometers during a year, the average operating cost is 11.4 cents per kilometer. If a truck is driven only 70,000 kilometers
during a year, the average operating cost increases to 13.4 cents per kilometer.
Required:
1. Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated with
the fleet of trucks.
2. Express the variable and fixed costs in the form Y = a + bx.
3. If a truck were driven 80,000 kilometers during a year, what total operating cost would you expect to be incurred?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Required 3
Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated
with the fleet of trucks. (Do not round your intermediate calculations. Round the…
Chapter 6 Solutions
Introduction To Managerial Accounting
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