Answered: The Company wants to determine a fuel…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 12EB: Able Transport operates a tour bus that they lease with terms that involve a fixed fee each month...

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The Company wants to determine a fuel surcharge to add to its customers' bills based on the number of miles driven to each area. It wants to separate the fixed and variable portion of the truck's operating costs so it has a better idea of how distance affects these costs. the Company has the following data available. Month Miles driven Total operating costs January 16,200 $22,650 February 17,000 $23,250 March 20,000 $25,000 April 16,500 $22,875 May 17,400 $23,550 June 15,000 $22,000 Using the high-low method, the monthly operating costs if the Company drives 21,000 miles in a month will be (Round any intermediary calculations to the nearest cent.)

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