CengageNowv2 1 Online × ( e Chegg Study 1 Gui om/ilm/takeAssignment/takeAssignme

Question

CengageNowv2 1 Online × ( e Chegg Study 1 Gui om/ilm/takeAssignment/takeAssignmentMain.do?invoker-assignments&takeAssignmentSessionLocator; assignment-take&inprogress-false; Show Me How eBook High-Low Method for a Service Company Boston Railroad decided to use the high-low method and operating data from the past six months to estimate the fixed and variable components of transportation costs. The activity base used by Boston Raliroad is a measure of railroad operating activity, termed "gross-ton miles: which is the total number of tons multiplied by the miles moved. Transportation Costs Gross-Ton Miles January February March April May June Determine the variable cost per gross-ton mile and the lixed coest. Variable cost (Round to two decimal places.) Total fixed cost $865,400 964,900 681,900 925,100 775,900 994,700 301,000 218,000 326,000 262,000 354,000 per gross-ton mile check My Work

Explanation / Answer

1.. Month Gross-ton miles Traspn. Costs Highest activity June 354000 994700 Lowest activity March 218000 681900 Difference 136000 312800 Difference /gross-ton mile 312800/136000= 2.3 So, Variable cost per gross-ton mile= 2.3 Fixed cost at these activiy bases Highest activity 994700-(354000*2.3)= 180500 Lowest activity 681900-(218000*2.3)= 180500 ANSWER: Variable cost/gross-ton mile $2.30 Total fixed costs 180500 2.. Graph-1 Total Fixed cost Horizontally straight-line graph--Total cost is same --irrespective of no.of units produced-- parallel to X-axis through-out. Graph-2 Mixed/Semi-fixed/semi-variable cost/unit Upward -sloping Line graph starts after a basic minimum fixed cost-- Fixed upto certain range of units produced & vary when the range changes. Graph-3-- Fixed cost /unit Down-ward sloping curve--Fixed cost per unit-- decreases as no.of units produced increase. Graph-4 -- Variable cost/unit Upward sloping right from the Origin of the graph--meaning 0 units 0 cost. Total Variable cost-- varies with every additional unit produced. 3.. a. Total direct material cost Graph-4 b.Electricity costs of $ 1000p.m.+0.10 per kwh. Graph-2 c.Per unit cost of st.line depn. On factory eqpt. Graph-3 d.Salary of quality control supervisor $ 20000 p.m. Graph-1 e.Per unit direct labor cost Graph-4

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.