Tanias Legal Services rents a photocopier. The company is charged a fixed annual rental plus a per-copy
Question:
Tania’s Legal Services rents a photocopier. The company is charged a fixed annual rental plus a per-copy charge. If the company makes 120 000 copies per year, the overall per-copy cost is estimated to be $0.12. If 90 000 copies are made during a year, it is estimated that the cost per copy is $0.14.
Required
A. Using the high-low method, estimate the variable rate per copy and the fixed annual rental fee.
B. What would be the total cost if 140 000 copies are made during a year?
C. If the variable rate per copy falls by $0.01 each time another 20 000 copies are made over and above 120000 copies, can Tania’s Legal Services approximate the cost of photocopying with a straight line?
Step by Step Answer:
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett