Question
Great Dane Lines operates limo services. They use four cost behaviors and the expected levels of cost-driver activity are given to you. You are required
Great Dane Lines operates limo services. They use four cost behaviors and the expected levels of cost-driver activity are given to you. You are required to predict total costs for one month for operating the limo services.
a. Fuel costs of driving vehicles, $0.48 per mile, driven 25,000 mile per month
b. Computer rental cost, $5000 per piece of equipment per year for three computers.
c. Crew supervisors' costs, where a new supervisor is hired for every 10 workers employed; the supervisors are paid $50,000 per year and there were 82 workers employed.
d. Purchasing department cost for 5,000 orders in one month. Its cost function is $9,000 per month plus $5 per material order processed.
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