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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 Maintenance Costs (thousands) ($000) 1,865 $3,547 2,045 $3,898 3,400 $6,310 Required: a. Use the high-low method to estimate the fixed cost of maintenance annually and the variable cost of maintenance per visitor. b. The company expects a record 2,700,000 visitors next year. What would be the estimated maintenance 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 Maintenance Costs (thousands) ($000) 1,865 $3,547 2,045 $3,898 3,400 $6,310 Required: a. Use the high-low method to estimate the fixed cost of maintenance annually and the variable cost of maintenance per visitor. b. The company expects a record 2,700,000 visitors next year. What would be the estimated maintenance costs?

FINANCIAL ACCOUNTING
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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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 Maintenance Costs (thousands) ($000) 1,865 $3,547 2,045 $3,898 3,400 $6,310 Required: a. Use the high-low method to estimate the fixed cost of maintenance annually and the variable cost of maintenance per visitor. b. The company expects a record 2,700,000 visitors next year. What would be the estimated maintenance costs?
Transcribed Image Text: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 Maintenance Costs (thousands) ($000) 1,865 $3,547 2,045 $3,898 3,400 $6,310 Required: a. Use the high-low method to estimate the fixed cost of maintenance annually and the variable cost of maintenance per visitor. b. The company expects a record 2,700,000 visitors next year. What would be the estimated maintenance costs?
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