BFA612 Managerial and cost accounting

Time Left: 3:10:25 3:15:00 Question 1 Hobart Travel offers a helicopter service from the regional town of Hamilton to Hobart Airport. Each of its 10 helicopters makes between 1,500 and 2,000 round- trips per year. The records indicate that a helicopter making 1,500 round-trips per year incurs an average operating cost of $350, per round-trip while one that makes 2,000 round-trips per year incurs an average operating cost of $300, per round-trip. Required a) Using the high-low method, estimate the linear relationship y = a + bX, where y is the total annual operating costs of a helicopter, and X is the number of round-trips it makes to Hobart Airport per year [4 marks]. [3 marks]. b) Give examples of costs that would be included in a, and b, respectively c) If Hobart Travel expects each of their helicopters to make, on average, 1,200 round-trips in the coming year, what would be the estimated operating budget for the entire helicopter fleet? [3 marks ]