uring the past year, the high and low use of three different resources for Fly High Airlines occurred in July and April. The resources are airplane depreciation, fuel, and airplane maintenance. The number of airplane flight hours is the driver. The total costs of the three resources and the related number of airplane flight hours are as follows: Resource Airplane Flight Hours Total Cost Airplane depreciation:     High 44,000          $ 18,000,000 Low 28,000          18,000,000 Fuel:     High 44,000          445,896,000 Low 28,000          283,752,000 Airplane maintenance:     High 44,000          15,792,000 Low 28,000          11,504,000   Required: Use the high-low method to answer the following questions. If an answer is zero, enter "0". 1.  What is the variable rate for airplane depreciation? $fill in the blank 1per flight hour What is the fixed cost for airplane depreciation? $fill in the blank 2 2.  What is the cost formula for airplane depreciation? Total cost of airplane depreciation = $fill in the blank 3 3.  What is the variable rate for fuel? $fill in the blank 4 per flight hour What is the fixed cost for fuel? $fill in the blank 5

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

uring the past year, the high and low use of three different resources for Fly High Airlines occurred in July and April. The resources are airplane depreciation, fuel, and airplane maintenance. The number of airplane flight hours is the driver. The total costs of the three resources and the related number of airplane flight hours are as follows:

Resource Airplane Flight Hours Total Cost
Airplane depreciation:    
High 44,000          $ 18,000,000
Low 28,000          18,000,000
Fuel:    
High 44,000          445,896,000
Low 28,000          283,752,000
Airplane maintenance:    
High 44,000          15,792,000
Low 28,000          11,504,000

 

Required:

Use the high-low method to answer the following questions. If an answer is zero, enter "0".

1.  What is the variable rate for airplane depreciation?
$fill in the blank 1per flight hour

What is the fixed cost for airplane depreciation?
$fill in the blank 2

2.  What is the cost formula for airplane depreciation?

Total cost of airplane depreciation = $fill in the blank 3

3.  What is the variable rate for fuel?
$fill in the blank 4 per flight hour

What is the fixed cost for fuel?
$fill in the blank 5

4.  What is the cost formula for fuel?

Total cost of fuel = $fill in the blank 6 x  

5.  What is the variable rate for airplane maintenance?
$fill in the blank 8 per flight hour

What is the fixed cost for airplane maintenance?
$fill in the blank 9

6.  What is the cost formula for airplane maintenance?

Total cost of airplane maintenance = $fill in the blank 10 + ( $fill in the blank 11 ×   )

7.  Using the three cost formulas that you developed, predict the cost of each resource in a month with 36,000 airplane flight hours.

Total cost of airplane depreciation $fill in the blank 13
Total cost of fuel $fill in the blank 14
Total cost of airplane maintenance $fill in the blank 15

 

  •  

 

Check My Work

 

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 3 images

Blurred answer
Knowledge Booster
Cost estimation
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education