Question
Asked Jan 17, 2020
25 views

Identifying variable-, fixed-, and mixed-cost functions. The Sunrise Corporation operates car rental agencies at more than 20 airports. Customers can choose from one of three contracts for car rentals of one day or less:

Contract 1: $45 for the day
Contract 2: $25 for the day plus SO.30 per mile traveled
• Contract 3: $1.50 per mile traveled
Plot separate graphs for each of the three contracts, with costs on the vertical axis and miles traveled
on the horizontal axis.
Express each contract as a linear cost function of the form y = a + bX.
Identify each contract as a variable-, fixed-, or mixed-cost function.
Required
1.
2.
3.
help_outline

Image Transcriptionclose

Contract 1: $45 for the day Contract 2: $25 for the day plus SO.30 per mile traveled • Contract 3: $1.50 per mile traveled Plot separate graphs for each of the three contracts, with costs on the vertical axis and miles traveled on the horizontal axis. Express each contract as a linear cost function of the form y = a + bX. Identify each contract as a variable-, fixed-, or mixed-cost function. Required 1. 2. 3.

fullscreen
check_circle

Expert Answer

Step 1

1.

The costs for all the three contracts are calculated for the different miles travelled in the tables are given below:

Accounting homework question answer, step 1, image 1
fullscreen
Step 2

The plot for the contract 1:

The cost are shown in the vertical axis (Y-axis) and the miles travelled are shown on the horizontal axis (X-axis) and the  plot line show the  relationship between different cost and miles traveled of contract 1.

 

 

 

Accounting homework question answer, step 2, image 1
fullscreen
Step 3

The plot for the contract 2:

The cost are shown in the vertical axis (Y-axis) and the miles travelled are shown on the horizontal ax...

Accounting homework question answer, step 3, image 1
fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Accounting

Cost Accounting

Related Accounting Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: Once equipment has been installed and placed in operation,subsequent expenditures relating to this e...

A: All expenses incurred in relation to bringing the asset to put to use needs to be capitalised. Once ...

question_answer

Q: Mike Gordon wishes to have $80,000 in five years. If he can earn annual interest of 2%, how much mus...

A:  

question_answer

Q: The Cloud Company employs a perpetual inventory system and the McKenzie Corporation uses a periodic ...

A: Perpetual and periodic inventory system: In merchandise business, there are two types of inventory s...

question_answer

Q: Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $12,000...

A: When a fixed asset is exchanged for another fixed asset and the exchange has commercial substance, t...

question_answer

Q: Define interest.

A: Interest is the amount charged by the lender for the money lend for specific period. 

question_answer

Q: Estimated Warranty Liability Savory Co. sold $764,000 of equipment during January under a one-year w...

A: Record journal entry for the estimated warranty expense on January 31 for January sales as shown bel...

question_answer

Q: Burke Company has purchased two tracts of land. Onetract will be the site of its new manufacturing p...

A: Click to see the answer

question_answer

Q: Computing and recording gross and net pay Hugh Stanley manages a Dairy House drive-in. His straight-...

A: 1. 

question_answer

Q: Samtech Manufacturing purchased land and building for $4 million. In addition to the purchase price,...

A: 1.