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Turtle Transport Ltd. provides long distance trucking services in Western Canada. The total overhead costs at various levels of activity are presented below: MONTH March
Turtle Transport Ltd. provides long distance trucking services in Western Canada. The total overhead costs at various levels of activity are presented below: MONTH March April May June TOTAL OVERHEAD COSTS $388,000 $340,000 $485,000 $483,000 TOTAL KM's DRIVEN 100,000 80,000 135,000 140,000 Assume that the total overhead cost consists of utilities, supervisory salaries and truck ma The breakdown of these costs at the 80,000 KM April level is as follows: Utilities (variable cost) $104,000 Salaries (fixed cost) $130,000 Maintenance (mixed cost) $106,000 Total April overhead cost $340,000 In July the company expects to incur 110,000 KM's of activity. REQUIRED: Round your calculations to 2 decimals. 1. Calculate the Maintenance cost in each of the months March to June. 2. For the month of July calculate the cost of. ) Salaries (i) Utilities (ii) Maintenance (use the least squares method using your calculator, formulae or MS Excel) 3 Using the information in the question and the items calculated at (a) above, prepare a formula in the format Y = a + bx that represents the total overhead costs. Identify the equation components of utilities, supervisory salaries, and truck maintenance. 4. Explain briefly to the CEO of Turtle Transport Ltd. how the company might use their understanding of the above cost behaviours to control overhead costs in the future
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