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:
Resource | Airplane Flight Hours | Total Cost | |||
Airplane depreciation: | |||||
High | 44,000 | $ 18,800,000 | |||
Low | 28,000 | $ 18,800,000 | |||
Fuel: | |||||
High | 44,000 | 445,896,000 | |||
Low | 28,000 | 283,752,000 | |||
Airplane maintenance: | |||||
High | 44,000 | 16,032,000 | |||
Low | 28,000 | 12,104,000 |
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 = $ #### + ( $ #### Number of airplane flight hours)
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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