Apply the hi-lo method to the following exercise using the instructions and template provided.

During 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: Total Cost Resource Airplane Flight Hours Airplane depreciation High 44,000 28,000 18,000,000 Low 18,000,000 Fuel: High 44,000 28,000 445,896,000 Low 283,752,000 Airplane maintenance: High 44,000 28,000 15,792,000 11,504,000 Low Refer to the information for Fly High Airlines above. Required: Use the high-low method to answer the following questions. 1. What is the variable rate for airplane depreciation? The fixed cost? 2. What is the cost formula for airplane depreciation? 3. What is the variable rate for fuel? The fixed cost? 4. What is the cost formula for fuel? 5. What is the variable rate for airplane maintenance? The fixed cost? 6. What is the cost formula for airplane maintenance? 7. Using the three cost formulas that you developed, predict the cost of each resource in a month with 36,000 airplane flight hours. 1. Airplane Depreciation: Variable rate= (High point cost Low point cost) (High point flights Low point flights) Total cost at x Output at high point) ... Fixed cost high point (Variable rate 2. Variable cost Fixed cost Total cost of airplane depreciation Which is true? 3. Fuel Variable rate=(High point cost Low point cost)(High point flights Low point flights) Total cost at Fixed cost high point (Variable rate x Output at high point) x Output at high point) (Variable rate 4. Variable cost Fixed cost Total cost of fuel Which is true? 5. Maintenance: (High point cost Low point cost) (High point flights Low point flights) Variable rate Total cost at Fixed cost high point (Variable rate x Output at high point) ... ... ... (Variable rate x Output at high point) Variable cost 5. Fixed cost Total cost of maintenance Which is true? 7. Total cost of the resource at 36,000 machi ne hours: Fixed cost (Variable rate Output Depreciation Fuel Maintenance Total cost