Exercise 6–30 Rio Bus Tours has incurred the following bus maintenance costs during the recent tourist season. (The real is Brazil's national monetary unit. On the day this exercise was written, the real was equivalent in value to .269 U.S. dollar.) High-Low Method; Tour Company (LO 6-1, 6-2, 6-5) Miles Traveled Month by Tour Buses Cost November 8,500 11,400 real December 10,600 11,600 January 12,700 11,700 February March 15,000 12,000 20,000 12,500 April 8,000 11,000 Requlred: 1. Use the high-low method to estimate the variable cost per tour mile traveled and the fixed cost per month. :: 2. Develop a formula to express the cost behavior exhibited by the company’s maintenance cost. 3. Predict the level of maintenance cost that would be incurred during a month when 22,000 tour miles are driven. (Remember to express your answer in terms of the real.)
Exercise 6–30 Rio Bus Tours has incurred the following bus maintenance costs during the recent tourist season. (The real is Brazil's national monetary unit. On the day this exercise was written, the real was equivalent in value to .269 U.S. dollar.) High-Low Method; Tour Company (LO 6-1, 6-2, 6-5) Miles Traveled Month by Tour Buses Cost November 8,500 11,400 real December 10,600 11,600 January 12,700 11,700 February March 15,000 12,000 20,000 12,500 April 8,000 11,000 Requlred: 1. Use the high-low method to estimate the variable cost per tour mile traveled and the fixed cost per month. :: 2. Develop a formula to express the cost behavior exhibited by the company’s maintenance cost. 3. Predict the level of maintenance cost that would be incurred during a month when 22,000 tour miles are driven. (Remember to express your answer in terms of the real.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 6–30
High-Low Method; Tour Company
Rio Bus Tours has incurred the following bus maintenance costs during the recent tourist season. (The real is Brazil’s national monetary unit. On the day this exercise was written, the real was equivalent in value to .269 U.S. dollar.)
Required:
1. Use the high-low method to estimate the variable cost per tour mile traveled and the fixed cost per month.
2. Develop a formula to express the cost behavior exhibited by the company’s maintenance cost.
3. Predict the level of maintenance cost that would be incurred during a month when 22,000 tour miles are driven. (Remember to express your answer in terms of the real.)
4. Build a spreadsheet: Construct an Excel spreadsheet to solve all of the preceding requirements.
Show how the solution will change if the following information changes: in March there were 21,000 miles traveled and the cost was 12,430 real.
Transcribed Image Text:I Exercise 6-30
Rio Bus Tours has incurred the following bus maintenance costs during the recent tourist season. (The
real is Brazil's national monetary unit. On the day this exercise was written, the real was equivalent in
value to .269 U.S. dollar.)
High-Low Method; Tour
Company
(LO 6-1, 6-2, 6-5)
Miles Traveled
Month
by Tour Buses
Cost
November
8,500
11,400 real
December
10,600
11,600
January
12,700
11,700
February
15,000
12,000
March
20,000
12,500
Аpril
8,000
11,000
Required:
1. Use the high-low method to estimate the variable cost per tour mile traveled and the fixed cost per
month.
2. Develop a formula to express the cost behavior exhibited by the company's maintenance cost.
3. Predict the level of maintenance cost that would be incurred during a month when 22,000 tour
miles are driven. (Remember to express your answer in terms of the real.)
4. Build a spreadsheet: Construct an Excel spreadsheet to solve all of the preceding requirements.
Show how the solution will change if the following information changes: in March there were
Customize..
21,000 miles traveled and the cost was 12,430 real.
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