Bethany Link delivers parts for several local auto parts stores. She charges clients $1.73 per mile driven. She has determined that if she drives 1,400 miles in a month, her average operating cost is $1.53 per mile. If Bethany drives 2,800 miles in a month, her average operating cost is $0.90 per mile. Required: 1. Using the high-low method, determine Bethany's variable and fixed operating cost components. 2. Complete the contribution margin income statement for the business last month, when Bethany drove 1,540 miles. (Assume this falls within the relevant range of operations). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using the high-low method, determine Bethany's variable and fixed operating cost components. (Round your cost per unit answer to 2 decimal places.)

Bethany Link delivers parts for several local auto parts stores. She charges clients $1.73 per mile driven. She has determined that if she drives 1,400 miles in a month, her average operating cost is $1.53 per mile. If Bethany drives 2,800 miles in a month, her average operating cost is $0.90 per mile. Required: 1. Using the high-low method, determine Bethany's variable and fixed operating cost components. 2. Complete the contribution margin income statement for the business last month, when Bethany drove 1,540 miles. (Assume this falls within the relevant range of operations). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using the high-low method, determine Bethany's variable and fixed operating cost components. (Round your cost per unit answer to 2 decimal places.)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 2EB: Salley is developing material and labor standards for her company. She finds that it costs $0.55 per...

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Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 1.5 hours. On average, HHH completes about 15,000 cleanings per year. The following total costs are associated with the total cleanings: Next year, HHH expects to purchase 25,600 of direct materials. Projected beginning and ending inventories for direct materials are as follows: There is no work-in-process inventory; in other words, a cleaning is started and completed on the same day. Required: 1. Prepare a statement of services produced in good form. 2. What if HHH planned to purchase 30,000 of direct materials? Assume there would be no change in beginning and ending inventories of materials. Explain which line items on the statement of services produced would be affected and how (increase or decrease).
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