Question
Determine the variable cost per unit and then fixed costs, from the cost estimation method: high and low method. A company displays maintenance costs and
Determine the variable cost per unit and then fixed costs, from the cost estimation method: high and low method.
A company displays maintenance costs and mileage data for its bus fleet over a 4-month period. The high and low levels of activity are 50,000 miles in April and 20,000 miles in January. The maintenance costs at these 2 levels are $ 63,000 and $ 30,000, respectively. 1. Identify the difference in maintenance costs. 2. Identify the difference in miles. 3. Determine the variable cost per unit considering the previous data. 4. Present the data in a table. 5. Determine the fixed costs, considering the previous data. 6. Present the data in a table considering the high and low level respectively.
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