analysis estimated the total fixed costs to be month and the variable cost to be $317.86 per unit. How would the straight line test you drew in requirement 2 differ from a straight line that minimizes the sum of the square ros? What factors, other than the number of units shipped, are likely to affect the company's ship ping expense? Explain. EXERCISE 2-11 Traditional and Contribution Format Income Statements (LOS) Haki Shop, Inc., is a large retailer of surfboards. The company assembled the information shown below for the quarter ended May 31: $800,000 $400 $50 Total sales revenue. . Selling price per surfboard ..... Variable selling expense per surfboard Variable administrative expense per surfboard ... Total forced selling expense..... Total fixed administrative expense...... Merchandise inventory, beginning balance ...... Merchandise inventory, ending balance ......... Merchandise purchases... $20 $150,000 $120,000 $80,000 $100,000 $320,000 Required 1. Prepare a traditional income statement for the quarter ended May 31. 2. Prepare a contribution format income statement for the quarter ended May 31. 3. What was the contribution toward fixed expenses and profits for each surfboard sold during the quarter? (State this figure in a single dollar amount per surfboard.) EXERCISE 2-12 Cost Behavior; High-Low Method [LO3, L04) Speedy Parcel Service operates a fleet of delivery trucks in a large metropolitan area. A careful study by the company's cost analyst has determined that if a truck is driven 120,000 miles during a year, the average operating cost is 1 1.6 cents per mile. If a truck is driven only 80,000 miles during a year, the average operating cost increases to 13.6 cents per mile. Required: 1. Using the high-low method, estimate the variable and fixed cost elements of the annual cost of truck operation. 2. Express the variable and fixed costs in the form Y = a + bx. 3. If a truck were driven 100,000 miles during a year, what total cost would you expect to be incurred? EXERCISE 2-13 High-Low Method; Predicting Cost [LO3, L04) The number of X-rays taken and X-ray costs over the last nine months in Beverly Hospital are given below: X-Rays Taken X-Ray Costs Month January .......... February March. April .... May June.... 6,250 7,000 5,000 4.250 4,500 3,000 3,750 5,500 5,750 $28,000 $29,000 $23,000 $20,000 $22,000 $17,000 $18,000 $24,000 $26,000 July. August September ...... analysis estimated the total fixed costs to be month and the variable cost to be $317.86 per unit. How would the straight line test you drew in requirement 2 differ from a straight line that minimizes the sum of the square ros? What factors, other than the number of units shipped, are likely to affect the company's ship ping expense? Explain. EXERCISE 2-11 Traditional and Contribution Format Income Statements (LOS) Haki Shop, Inc., is a large retailer of surfboards. The company assembled the information shown below for the quarter ended May 31: $800,000 $400 $50 Total sales revenue. . Selling price per surfboard ..... Variable selling expense per surfboard Variable administrative expense per surfboard ... Total forced selling expense..... Total fixed administrative expense...... Merchandise inventory, beginning balance ...... Merchandise inventory, ending balance ......... Merchandise purchases... $20 $150,000 $120,000 $80,000 $100,000 $320,000 Required 1. Prepare a traditional income statement for the quarter ended May 31. 2. Prepare a contribution format income statement for the quarter ended May 31. 3. What was the contribution toward fixed expenses and profits for each surfboard sold during the quarter? (State this figure in a single dollar amount per surfboard.) EXERCISE 2-12 Cost Behavior; High-Low Method [LO3, L04) Speedy Parcel Service operates a fleet of delivery trucks in a large metropolitan area. A careful study by the company's cost analyst has determined that if a truck is driven 120,000 miles during a year, the average operating cost is 1 1.6 cents per mile. If a truck is driven only 80,000 miles during a year, the average operating cost increases to 13.6 cents per mile. Required: 1. Using the high-low method, estimate the variable and fixed cost elements of the annual cost of truck operation. 2. Express the variable and fixed costs in the form Y = a + bx. 3. If a truck were driven 100,000 miles during a year, what total cost would you expect to be incurred? EXERCISE 2-13 High-Low Method; Predicting Cost [LO3, L04) The number of X-rays taken and X-ray costs over the last nine months in Beverly Hospital are given below: X-Rays Taken X-Ray Costs Month January .......... February March. April .... May June.... 6,250 7,000 5,000 4.250 4,500 3,000 3,750 5,500 5,750 $28,000 $29,000 $23,000 $20,000 $22,000 $17,000 $18,000 $24,000 $26,000 July. August September