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The following information is available for a company's maintenance cost over the last seven months. Month Maintenance Hours Maintenance Cost $ June 9 5,450 6,900
The following information is available for a company's maintenance cost over the last seven months. Month Maintenance Hours Maintenance Cost $ June 9 5,450 6,900 5,100 6,000 6,900 8,100 July August September October 18 12 15 21 November 24 December 3,600 6 Using the high-low method, estimate both the fixed and variable components of its maintenance cost. High-Low method - Calculation of variable cost per maintenance hour Total cost at the high point Variable costs at the high point: Volume at the high point: Variable cost per maintenance hour Total variable costs at the high point Total fixed costs Total cost at the low point Variable costs at the low point Volume at the low point: Variable cost per maintenance hour Total variable costs at the low point Total fixed costs Singh Co. reports a contribution margin of $960,000 and fixed costs of $720,000. (1) Compute the company's degree of operating leverage. (2) If sales increase by 15%, what amount of income willl Singh Co. report? Degree of operating leverage Percent change in income Amount of income reported
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