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Changing the Cost Formula for a Month to the Cost Formula for a Year During the past year, the high and low use of three
Changing the Cost Formula for a Month to the Cost Formula for a Year 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: Airplane Flight Resource 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 16,800,000 Low 28,000 12,264,000 If required, round calculations and answers to nearest dollar. 1. Develop an annual cost formula for airplane depreciation. Total annual cost of airplane depreciation = 12 V X($ 18,000,000) Develop an annual cost formula for fuel. Total annual cost of fuel = $ 10,134 x Annual number of airplane flight hours Develop an annual cost formula for airplane maintenance. 12 X ) + ( $ 283.50 X X Total annual cost of airplane maintenance = 4,326,000 x x $ Annual number of airplane flight hours) 2. Using the three annual cost formulas that you developed, predict the cost of each resource in a year with 487,000 airplane flight hours. Total annual cost of airplane depreciation 216,000,000 Total annual cost of fuel 4,935,258,000 / Total annual cost of airplane maintenance 189,976,500 X
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