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?

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

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 8DQ: Describe the cost formula for a strictly fixed cost such as depreciation of 15,000 per year.

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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(thousands) Maintenance Costs($000) 1,830 $ 2,316 2,010 2,559 2,700 3,360 Required: a. Use the high-low method to estimate the fixed cost of maintenance annually and the variable cost of maintenance per visitor. (Enter your answers in dollars not in thousands of dollars. Round "Variable cost" answer to 2 decimal places.) b. The company expects a record 2,000,000 visitors next year. What would be the estimated maintenance costs? (Enter your answer in dollars not in thousands of dollars.)
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Buckeye Company has provided the following data for maintenance costs: Prior Year Current Year Machine hours 19,100 22,200 Maintenance cost $30,500 $34,220 Required: The best estimate of the cost formula for maintenance would be: (Do not round intermediate calculations. Round your Variable cost per unit to 2 decimal places.) a) $7,580 per year plus $.833 per machine hour. b) $26,640 per year plus $.833 per machine hour. c) $7,580 per year plus $1.20 per machine hour. d) $30,500 per year plus $1.20 per machine hour.
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A general manager wants to know the economic service life of currently owned machines. The market value of the machines and the maintenance and operating costs are shown below. Use the company’s MARR of 15% per year to determine the ESL. Year Market Value Annual Cost Total Annual Worth 0 $40,000 N/A N/A 1 $30,000 $20,000 -$36,000 2 $25,000 $22,000 -$33,907 3 $12,000 $24,000 4 $2,000 $26,000 -$36,263
Philippine Island Tours has incurred the following bus maintenance costs during the recent tourist season. Answer the following: Using the high-low method, determine which month is the highest? Using the high-low method, determine which month is the lowest? Using the high-low method, determine the variable cost per tour mile traveled. (Use this format 0..123) Using the high-low method, determine fixed cost per month (Use this format 10,000) Using the high-low method Develop a formula to express the cost behavior exhibited by the company’s maintenance cost. (Use this format Y=2a+10) Using the high-low method, predict the level of maintenance cost that would be incurring during the month of May when 34,000 tour miles are driven. (Use this format 10,000)
ake's Roof Repair has provided the following data concerning its costs: Fixed Cost per Month Cost per Repair-Hour $ 21,300 $ 16.00 $ 7.00 $ 0.50 $ 1.50 Wages and salaries Parts and supplies Equipment depreciation $ 2,770 Truck operating expenses $5,780 $ 4,630 Administrative expenses $3,820 $ 0.80 For example, wages and salaries should be $21,300 plus $16.00 per repair-hour. The company expected to work 2,900 repair-hours in May, but actually worked 2,800 repair-hours. The company expects its sales to be $46.00 per repair-hour. Required: Compute the company's activity variances for May. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Rent
Ultrasonic Company manufactures ultrasound equipment. Based on past experience, Ultrasonic has found that total annual repair and maintenance cost can be represented by the following formula: Total annual repair and maintenance cost = $205,000 + $7.50x, where x = machine hours. Last year, Ultrasonic incurred 145,000 machine hours. A. What was the total repair and maintenance cost incurred by Ultrasonic last year?fill in the blank 1 of 6$ B. What was the total fixed repair and maintenance cost incurred by Ultrasonic last year?fill in the blank 2 of 6$ C. What was the total variable repair and maintenance cost incurred by Ultrasonic last year?fill in the blank 3 of 6$ D. What was the total repair and maintenance cost per machine hour last year? (Round answer to two decimal places.)fill in the blank 4 of 6$ E. What was the fixed repair and maintenance cost per machine hour last year? (Round answer to two decimal places.)fill in the blank 5 of 6$ F. What was the variable repair…
How to solve this question on excel using excel formulas?
sing ACM, determine hourly rate to charge for this scenario: Machine cost $350,000 (w/tires) Regular maintenance $20,000 per yr Tires replaced once after 3 years; cost $4,000 present and in future Major repair in year 3 for $10,000 Salvage for $90,000 after 6 years 1,800 hrs/yr MARR = 6%
H. The Retread Tire Company recaps tires. The fixed annual cost a tire is $9.00. The company charges $25 to recap a tire. the recapping operation is $60,000. The variablec ost or recapping a) For an annual volume of 12,000 tires, determine the total cost, total revenue, and profit. b) Determine the annual break-even volume for the Retread Tire Company operation. c) Determine the contribution margin. d) If the maximum operating capacity of the Retread Tire Company, is 8,000 tires annually, determine the break-ev percentage of that capacity. en volume as a Fixed cost = Variable cost = In the Formula, box type in the formula in word calculate the answer. s that you used to Price = a) V= TC= TR= Formula: Fomula: Fomula: Profit= per year b) V = tires per year Fomula: c) What is the Contribution Margin? Fomula: d) сарасity%3D % cf capacity = Fomula: