Required information EX 6-30 (Static) High-Low Method; Tour Company (LO 6-1, 6-2, 6-5) [The following information applies to the questions displayed below.] 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 0.2545 U.S. dollar.] Month November December January February March April Miles Traveled by Tour Buses 8,500 10,600 12,700 15,000 20,000 8,000 Cost 11,400 real 11,600 11,700 12,000 12,500 11,000 EX 6-30 (Static) Part 1: Rio Bus Tours has incurred the following bus maintenance costs...

Required information EX 6-30 (Static) High-Low Method; Tour Company (LO 6-1, 6-2, 6-5) [The following information applies to the questions displayed below.] 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 0.2545 U.S. dollar.] Month November December January February March April Miles Traveled by Tour Buses 8,500 10,600 12,700 15,000 20,000 8,000 Cost 11,400 real 11,600 11,700 12,000 12,500 11,000 EX 6-30 (Static) Part 1: Rio Bus Tours has incurred the following bus maintenance costs...

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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The McGraw Company is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the maintenance costs must be determined. The accounting staff has suggested that linear regression be employed to derive an equation in the form of y = a + bx for maintenance costs. Data regarding the maintenance hours and costs for last year and the results of the regression analysis are as follows: (CMA adapted) Hours of January February March April May June July August September October November December Sum Average A coefficient B coefficient Standard error of the a coefficient Standard error of the b coefficient Standard error of the estimate R² T-value a T-value b Activity 480 320 400 300 500 310 320 520 490 470 350 340 4,800 400 49.515 0.12126 Maintenance Costs 4,200 3,000 3,600 2,820 4,350 2,960 3,030 4,470 4,260 4,050 3,300 3,160 $ $ 43,200 3,600 684.65 7.2884 34.469 0.99724 13.827 60.105 What is the variable cost per hour using the high-low…
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Question: Use the high-low method to determine the estimating cost function with machine-hours as the cost If July's estimated machine-hours are 4,500, calculate the total estimated operating costs of the Machining Department using the cost function in (a)? Max has used least squares regression analysis to obtain the following output:
Determine fixed and variable costs using the high-low method and prepare graph. E2.26 (LO 3) The controller of Furgee Industries has collected the following monthly expense data for use in analyzing the cost behaviour of maintenance costs. Total Maintenance Costs Total Machine Hours Month January February March April May June $2,500 3,000 3,600 4,500 3,200 4,900 300 350 500 690 400 700 Instructions a. Determine the fixed and variable cost components using the high-low method. b. Prepare a graph showing the behaviour of maintenance costs, and identify the fixed and variable cost components. Use 100-hour increments and $1,000 cost increments.
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