None Delivery Dudes Services has the collected the followinginformation about operating expenditures for its delivery trucksfor the past five years:Year MilesOperating costs2013 45,000 $185,0002014 60,000 $200,0002015 40,000 $170,0002016 55,000 $195,0002017 75,000 $215,150Using the high-low method, what is the estimated fixed costfor 2018 at an activity level of 50,000 miles?a. $123,200.b. $152,200.c. $134,600.d. $118,400.

Step 1: Introduction to the High-Low MethodThe high-low method is a technique to analyze mixed costs…

Answered: Delivery Dudes Services has the…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 19E: A company is spending 70,000 per year for inspecting, 60,000 per year for purchasing, and 56,000 per...

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Please help me find fixed costs. Oak Island Amusements Center provides the following data on the costs of maintenance and the number of visitors for the last three years. Number of Visitors per Year (thousands) Maintenance Costs($000) 1,825 $ 2,925 2,007 3,225 2,375 3,750 Required: a. Use the high-low method to estimate the fixed cost of maintenance annually and the variable cost of maintenance per visitor
Oak Island Amusements Center provides the following data on the costs of maintenance and the number of visitors for the last three years. Number of Visitors per Year(thousands) Maintenance Costs($000) 1,830 $ 2,316 2,010 2,559 2,700 3,360 Required: a. Use the high-low method to estimate the fixed cost of maintenance annually and the variable cost of maintenance per visitor. (Enter your answers in dollars not in thousands of dollars. Round "Variable cost" answer to 2 decimal places.) b. The company expects a record 2,000,000 visitors next year. What would be the estimated maintenance costs? (Enter your answer in dollars not in thousands of dollars.)
If a company undertakes a quality improvement program, it would spend an additional $370,000 on raw materials inspection and an additional $250,000 on finish goods inspection. This quality improvement program would save the company $410,000 in rework. What would be the cost or savings of undertaking this quality improvement program? OA. $1,030,000 in additional costs OB. $210,000 in additional costs OC. $210,000 in savings OD. $1,030,000 in savings
A company is spending 70,000 per year for inspecting, 60,000 per year for purchasing, and 56,000 per year for reworking products. What is a good estimate of non-value-added costs? a. 126,000 b. 70,000 c. 56,000 d. 130,000
Suppose that a company is spending 60,000 per year for inspecting, 30,000 for purchasing, and 40,000 for reworking products. A good estimate of nonvalue-added costs would be a. 70,000. b. 130,000. c. 40,000. d. 90,000. e. 100,000.
Rosman Company has an opportunity to pursue a capital budgeting project with a five-year time horizon. After careful study, Rosman estimated the following costs and revenues for the project: Cost of new equipment needed Sale of old equipment no longer needed Working capital needed Equipment maintenance in each of Years 3 and 4 Annual revenues and costs: Sales revenues Variable expenses Fixed out-of-pocket operating costs $430,000 $ 82,000 $ 67,000 $ 22,000 $430,000 $185,000 $104,000 The new piece of equipment mentioned above has a useful life of five years and zero salvage value. The old piece of equipment mentioned above would be sold at the beginning of the project and there would be no gain or loss realized on its sale. Rosman uses the straight-line depreciation method for financial reporting and tax purposes. The company's tax rate is 30% and its after-tax cost of capital is 11%. When the project concludes in five years the working capital will be released for investment elsewhere…
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The following are the annual costs of Peter Corp. relating to Material A which required 40,000 units per year: Unit Cost Insurance cost $20 Storage cost 32 Freight in 36 Order cost 10 Interest that could have been earned on the alternative investment of funds $320,000 What is the annual carrying cost per unit?
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Lander Company has an opportunity to pursue a capital budgeting project with a five-year time horizon. Lander estimated the following costs and revenues for the project: Cost of equipment needed Working capital needed Repair of the equipment in two years Annual revenues and costs: Sales revenues Variable expenses Fixed out-of-pocket operating costs $ 320,000 $ 69,000 $ 22,500 $ 440,000 $ 225,000 $ 98,000 The piece of equipment mentioned above has a useful life of five years and zero salvage value. Lander uses straight-line depreciation for financial reporting and tax purposes. The company's tax rate is 30% and its after-tax cost of capital is 11%. When the project concludes in five years, the working capital will be released for investment elsewhere within the company. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. 2. Net present value Required: 1. Calculate the net present value of this investment opportunity. Note:…
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Predict the level of maintenance cost that would be incurred during a month when 22,000 tour miles are driven.

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