E5-20 (Algo) Estimating Cost Behavior Using High-Low Method, Preparing Contribution Margin IncomeStatement [LO 5-3, 5-5]Anita Kaur runs a courier service in downtown Seattle. She charges clients $0.56 per mile driven. Anita has determined that if shedrives 2,150 miles in a month, her total operating cost is $575. If she drives 3,250 miles in a month, her total operating cost is $751.Required:1. Using the high-low method, determine Anita's variable and fixed operating cost components.2. Complete the contribution margin income statement for Anita's service assuming she drove 1,300 miles last month. (Assume thisfalls within the relevant range of operations).Complete this question by entering your answers in the tabs below.Required 1 Required 2Using the high-low method, determine Anita's variable and fixed operating cost components.Note: Round your cost per mile answer to 2 decimal places.Variable Cost per Mile DrivenFixed Cost

The objective of the question is to determine the variable and fixed operating cost components of…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Joyce Murphy runs a courier service in downtown Seattle. She charges clients $0.62 per mile driven. Joyce has determined that if she drives 2,450 miles in a month, her total operating cost is $725. If she drives 3,550 miles in a month, her total operating cost is $857. Required: 1. Using the high-low method, determine Joyce's variable and fixed operating cost components. 2. Complete the contribution margin income statement for Joyce's service assuming she drove 1,600 miles last month. (Assume this falls within the relevant range of operations).

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