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Problem 1: Cost behaviour: Committed and discretionary costs: high-low method Delta Mining Limited (DML), have mines ore in Australia's north-west, uses a calendar year for
Problem 1: Cost behaviour: Committed and discretionary costs: high-low method Delta Mining Limited (DML), have mines ore in Australia's north-west, uses a calendar year for financial reporting purposes. The following selected costs were incurred in December, the low point of activity, when 1 400 tonnes of ore were extracted. $ 30 000 12 000 315 000 140 000 240 000 Straight-line depreciation Charitable contributions Mining labour (including on costs) Royalties Trucking and haulage incurred only in December Peak activity of 2 700 tonnes occur red in June, resulting in mining labour costs (including on- costs) of $607 500, royalties of $224 500, and trucking and haulage costs of $360 000. The trucking and haulage costs exhibit the following behaviour: Less than 1 500 tonnes From 1 500 1899 tonnes From 1 900-2 299 tonnes From 2 300-2 699 tonnes $ 240 000 280 000 320 000 360 000 DML uses the high-low method for analysing cost behaviour Required
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