Question
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
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:
ResourceAirplane Flight
Hours
Total CostAirplane depreciation:High44,000$ 18,100,000Low28,000$ 18,100,000Fuel:High44,000445,896,000Low28,000283,752,000Airplane maintenance:High44,00015,864,000Low28,00012,344,000
1.variable rate for airplane depreciation
per flight hour
What is the fixed cost for airplane depreciation?
2.What is the cost formula for airplane depreciation?
Total cost of airplane depreciation
3.What is the variable rate for fuel?
per flight hour
What is the fixed cost for fuel?
4.What is the cost formula for fuel?
Total cost of fuel =
5.What is the variable rate for airplane maintenance?
per flight hour
What is the fixed cost for airplane maintenance?
6.What is the cost formula for airplane maintenance?
Total cost of 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. (Note: Do not round intermediate calculations.)
Total cost of airplane depreciation
Total cost of fuel
Total cost of airplane maintenance
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