Question
Help with below blanks Nation's Capital Fitness, Inc. operates a chain of fitness centers in the Washington, D.C., area. The firm's controller is accumulating data
Help with below blanks
Nation's Capital Fitness, Inc. operates a chain of fitness centers in the Washington, D.C., area. The firm's controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firm's equipment maintenance costs must be determined. The accounting staff has suggested the use of the high-low method to develop an equation, in the form ofY=a+bX, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows:
Month. Hours of Maintenance Service. Maintenance Costs
January 560 $5,530
February 490 4,170
March 250 2,740
April 490 4,340
May 350 2,980
June 470 4,130
July 320 3,020
August 430 3,550
September 480 3,990
October 390 3,260
November 380 3,170
December 370 3,040
Total 4,980 $43,920
Average 415* $3,660*
- Compute the predicted maintenance cost at 660 hours of activity.
Maintenance cost ________________
2.Compute the variable cost per hour and the fixed cost per hour at 670 hours of activity.(Round your answers to 2 decimal places.)
Variable cost per hour. ____________
Fixed cost per hour. ____________
Using the above blanks, what is the variable component of the maintenance cost? (Round to 2 decimal places)
Variable maintenance cost. ___________ per hour
- Using the high-low method of cost estimation, estimate the behavior of the maintenance costs incurred by Nation's Capital Fitness, Inc. Express the cost behavior pattern in equation form.(Round coefficient ofXto 2 decimal places and other answer to the nearest whole dollar amount.)
Monthly maintenance cost =. _______ + __________ X
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