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REQUIRED a) Using the high-low method, determine the fixed and variable components of the maintenance costs. b) Briefly explain advantage using ABC Costing in management Systems

REQUIRED a) Using the high-low method, determine the fixed and variable components of the maintenance costs. b) Briefly explain advantage using ABC Costing in management Systems

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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XYZ Inc. employed several maintenance engineers to keep the equipment running in peak condition. Over the past eight months, Travis incurred the following maintenance cost for these engineers. Plant activity is best measured by direct labor hours. Direct Labor Hours Maintenance Cost Month January February 1,700 2,000 $14,300 $16,200 March 1,800 $16,700 Аpril 1,600 $14,000 May 1,500 $14,300 June 1,300 $13,000 July August 1,000 $12,200 1,400 $14,200 REQUIRED a) Using the high-low method, determine the fixed and variable components of the maintenance costs. b) Briefly explain advantage using ABC Costing in management Systems
Transcribed Image Text:XYZ Inc. employed several maintenance engineers to keep the equipment running in peak condition. Over the past eight months, Travis incurred the following maintenance cost for these engineers. Plant activity is best measured by direct labor hours. Direct Labor Hours Maintenance Cost Month January February 1,700 2,000 $14,300 $16,200 March 1,800 $16,700 Аpril 1,600 $14,000 May 1,500 $14,300 June 1,300 $13,000 July August 1,000 $12,200 1,400 $14,200 REQUIRED a) Using the high-low method, determine the fixed and variable components of the maintenance costs. b) Briefly explain advantage using ABC Costing in management Systems
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