Delivery Dudes Services has the collected the following information about operating expenditures for its delivery trucks for the past five years: Year Miles Operating costs 2019 45,000 $185,000 2020 60,000 $200,000 2021 40,000 $170,000 2022 55,000 $195,000 2023 75,000 $215,150 Using the high-low method, what is the estimated fixed cost for 2024 at an activity level of 50,000 miles? a. $123,200. b. $152,200. c. $134,600. d. $118,400.

Delivery Dudes Services has the collected the following information about operating expenditures for its delivery trucks for the past five years: Year Miles Operating costs 2019 45,000 $185,000 2020 60,000 $200,000 2021 40,000 $170,000 2022 55,000 $195,000 2023 75,000 $215,150 Using the high-low method, what is the estimated fixed cost for 2024 at an activity level of 50,000 miles? a. $123,200. b. $152,200. c. $134,600. d. $118,400.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter5: Activity-based Costing And Management

Section: Chapter Questions

Problem 16MCQ: Suppose that a company is spending 60,000 per year for inspecting, 30,000 for purchasing, and 40,000...

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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…
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.