A3 Hoi Chong Transport, Limited, operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven123.000 kilometers during a year, the average operating cost is 132 cents per kilometer. If a truck is driven only 82,000 kilometersduring a year, the average operating cost increases to 15.4 cents per kilometer.Required:1. Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated withthe fleet of trucks.2. Express the variable and fixed costs in the form Y = a + bx3. If a truck were driven 102,500 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 2Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associatedwith the fleet of trucks. (Do not round your intermediate calculations. Round the Variable cost per kilometer to 3 decimalplaces.)Required 3Variable costFixed costper kilometerper yearRequel tRequired 2 >

The high-low method is used to separate the fixed and variable costs from the mixed costs of…

Answered: nsport 123.000 kilometers during a…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 11P: Emerald Island Company is considering building a manufacturing plant in County Kerry. Predicting...

See similar textbooks

Similar questions

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 96,000 kilometers during a year, the average operating cost is 10.3 cents per kilometer. If a truck is driven only 64,000 kilometers during a year, the average operating cost increases to 11.5 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. Note: Do not round your intermediate calculations. Round…
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?
Amarjit Truckers, Ltd. operates a fleet of delivery trucks in North America. The company has determined that, if a truck is driven 120,000 kilometres during a year, the average operating cost is 18.000 cents per kilometre. If a truck is driven only 50,000 kilometres during a year, the average operating cost increases to 21.0 cents per kilometre. Required: 1. Using the high - low method, estimate the variable and fixed cost elements of the annual cost of truck operation. (Do not round intermediate calculations. Round the "Variable cost" to 5 decimal places. Round "Fixed cost" to 2 decimal places.) 2. Express the variable and fixed costs in the form Y = a + bX. (Do not round intermediate calculations. Round the "Variable cost" to 5 decimal places. Round "Fixed cost" to 2 decimal places.) 3. If a truck were driven 80,000 kilometres during a year, what total cost would you expect to be incurred? (Do not round intermediate calculations. Round "Total annual cost" to 2 decimal places.)
We Deliver operates a fleet of delivery trucks in Halifax. Analysis shows that if a truck is driven 150,000 kilometres during a year, the average operating cost is 11.9 cents ($0.119) per kilometre. If a truck is driven only 94,000 kilometres during a year, the average operating cost increases to 13.9 cents ($0.139) per kilometre. Required: 1. Using the high-low method, estimate the variable and fixed cost elements of the annual cost of truck operation. (Do not round your intermediate calculations. Round the "Variable cost per kilometer" to 3 decimal places.) High level of activity Low level of activity Change Variable cost per kilometer Fixed cost per year = Kilometers Driven 2. Express the variable and fixed costs in the form Y= a + bX. (Do not round your intermediate calculations. Round the "Variable cost per kilometer" to 3 decimal places.) Total Annual Cost Total annual cost 3. If a truck were driven 127,000 kilometres during a year, what total cost would you expect to be…
rr
We Deliver operates a fleet of delivery trucks in Halifax. Analysis shows that if a truck is driven 159,000 kilometres during a year, the average operating cost is 12.0 cents ($0.120) per kilometre. If a truck is driven only 85,000 kilometres during a year, the average operating cost increases to 13.9 cents ($0.139) per kilometre. Required: 1. Using the high–low method, estimate the variable and fixed cost elements of the annual cost of truck operation. (Do not round your intermediate calculations. Round the "Variable cost per kilometer" to 3 decimal places.) 2. Express the variable and fixed costs in the form Y = a + bX. (Do not round your intermediate calculations. Round the "Variable cost per kilometer" to 3 decimal places.) 3. If a truck were driven 139,400 kilometres during a year, what total cost would you expect to be incurred? (Do not round intermediate calculations. Round the "Variable cost per kilometer" to 3 decimal places.)
Alex Miller, Inc., sells car batteries to service stations for an average of $30 each. The variable cost of each battery is $20 and monthly fixed manufacturing costs total $10,000. Other monthly fixed costs of the company total $8,000. Required: a. What is the breakeven point in batteries? b. What is the margin of safety, assuming sales total $60,000? c. What is the breakeven level in batteries, assuming variable costs increase by 20%? d. What is the breakeven level in batteries, assuming the selling price goes up by 10%, fixed manufacturing costs decline by 10%, and other fixed costs decline by $100?
Solve this problem
The marketing manager of Tulip Corporation has determined that a market exists for a telephone with a sales price of Rs. 19 per unit. The production manager estimates the annual fixed costs of producing between 40,000 and 80,000 telephones would be Rs. 344,000. Required: Assume that Tulip desires to earn a Rs. 116,000 profit from the phone sales. How much can Tulip afford to spend on variable cost per unit if production and sales equal 46,000 phones?
Charlevoix Cases makes mobile phone cases. The company has collected the following price and cost characteristics: Sales price $ 12.00 per case Variable costs 5.50 per case Fixed costs 403,000 per year Assume that the company plans to sell 77,000 units annually. Consider requirements (b), (c), and (d) independently of each other. Required: What will be the operating profit? What is the impact on operating profit if the sales price decreases by 20 percent? Increases by 10 percent? Note: Do not round intermediate calculations. What is the impact on operating profit if variable costs per unit decrease by 20 percent? Increase by 10 percent? Note: Do not round intermediate calculations. Suppose that fixed costs for the year are 20 percent lower than projected and variable costs per unit are 20 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much? Note: Do not round intermediate…
Tiktok Company distributes a lightweight lawn chair that sell for P150 per unit. Variable costs are P60 per unit, and fixed costs total P1,800,000 annually. The company estimates that sales will increase by P450,000 during the coming year due to increased demand. Required: By how much should net income increase?

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Cost Accounting

Accounting

ISBN:

9781305087408

Author:

Edward J. Vanderbeck, Maria R. Mitchell

Publisher:

Cengage Learning

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Cornerstones of Cost Management (Cornerstones Ser…

Accounting

ISBN:

9781305970663

Author:

Don R. Hansen, Maryanne M. Mowen

Publisher:

Cengage Learning

Principles of Cost Accounting

Accounting

ISBN:

9781305087408

Author:

Edward J. Vanderbeck, Maria R. Mitchell

Publisher:

Cengage Learning

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Cornerstones of Cost Management (Cornerstones Ser…

Accounting

ISBN:

9781305970663

Author:

Don R. Hansen, Maryanne M. Mowen

Publisher:

Cengage Learning

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

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

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS