The KING Company would like you to estimate the maintenance costs on its delivery trucks. The cost is a mixed cost. The following data is obtained for the first 6 months of the year: Mileage Costs ($) January 12,000 17,000 February 10,000 16,700 March 12,800 15,200 April 11,000 15,920 May 16,000 21,200 18,080 June 14,000 Compute the fixed cost portion using the High-Low Method of estimating costs. A. $9,200 B. $10,000 C. $18,400 D. $17,500

The KING Company would like you to estimate the maintenance costs on its delivery trucks. The cost is a mixed cost. The following data is obtained for the first 6 months of the year: Mileage Costs ($) January 12,000 17,000 February 10,000 16,700 March 12,800 15,200 April 11,000 15,920 May 16,000 21,200 18,080 June 14,000 Compute the fixed cost portion using the High-Low Method of estimating costs. A. $9,200 B. $10,000 C. $18,400 D. $17,500

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 1CE: The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include:...

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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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