Item 5

Item 5 Part 4 of 4 2.85 points

Required information

[The following information applies to the questions displayed below.]

Nations Capital Fitness, Inc. operates a chain of fitness centers in the Washington, D.C., area. The firms controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firms 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 of Y = 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		550			$	5,003
February		490				4,250
March		260				2,770
April		450				4,280
May		360				2,990
June		440				4,200
July		360				3,060
August		410				3,590
September		480				3,960
October		390				3,210
November		380				3,250
December		350				3,090
Total		4,920			$	43,653
Average		410	*		$	3,638	*

*Rounded

1. 4-a. Compute the variable cost per hour and the fixed cost per hour at 610 hours of activity. (Round your answers to 2 decimal

   Item 5

   Item 5 Part 4 of 4 2.85 points

   Required information

   [The following information applies to the questions displayed below.]

   Nations Capital Fitness, Inc. operates a chain of fitness centers in the Washington, D.C., area. The firms controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firms 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 of Y = 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		550			$	5,003
   February		490				4,250
   March		260				2,770
   April		450				4,280
   May		360				2,990
   June		440				4,200
   July		360				3,060
   August		410				3,590
   September		480				3,960
   October		390				3,210
   November		380				3,250
   December		350				3,090
   Total		4,920			$	43,653
   Average		410	*		$	3,638	*

   *Rounded

   rev: 05_30_2018_QC_CS-128090

2. 4-a. Compute the variable cost per hour and the fixed cost per hour at 610 hours of activity. (Round your answers to 2 decimal place

Variable cost per hour

Fixed Cost per hour