CONNECT ONLINE ACCESS F/MANAGERIAL ACC.
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ISBN: 9781264445356
Author: Noreen
Publisher: MCG
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Chapter 2A, Problem 2A.3E
1.
To determine
Introduction: Cost volume profit analysis (CVP) is used to ascertain the affect on company’s net income and operating income with respect to change in costs and volume of the production of the company. Break-even point is the level of sales which minimum required to overcome fixed and variable cost of the company. It is the condition of no
2.
To determine
Introduction: Cost volume profit analysis (CVP) is used to ascertain the affect on company’s net income and operating income with respect to change in costs and volume of the production of the company. Break-even point is the level of sales which minimum required to overcome fixed and variable cost of the company. It is the condition of no profits and no loss for the company. To express: The variable and fixed cost in the form of
3.
To determine
Introduction: Cost volume profit analysis (CVP) is used to ascertain the affect on company’s net income and operating income with respect to change in costs and volume of the production of the company. Break-even point is the level of sales which minimum required to overcome fixed and variable cost of the company. It is the condition of no profits and no loss for the company.
To calculate:Total operating cost of the truck if it were driven 80,000 kilometer.
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Cost Behavior; High-Low Method
Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 105,000 kilometers during a year, the average operating cost is 11.4 cents per kilometer. If a truck is driven only 70,000 kilometers during a year, the average operating cost increases to 13.4 cents per kilometer.
Required:
1. Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated with the fleet of trucks.
2. Express the variable and fixed costs in the form Y = a + bX.
3. If a truck were driven 80,000 kilometers during a year, what total operating cost would you expect to be incurred?
Habib transport company Itd, operates a fleet of delivery trucks in Singapore. The Company has determined that if a truck is driven 135,000 kilometers during a year, The average operating cost is 11.8 cent per kilometers. If a truck driven 95,000 kilometers during a year, the average operating cost increases to 13.6 cents per kilometers.
Requirement
a) Using high-low method estimate the variable and fixed costs elements of the annual cost of truck operators.
b) Express the variable and fixed costs in the form y= a +bx
e) if a truck were driven to 100,000 kilometers during a year, what total cost would you expect to be incurred?
Exercise 5A-3 (Algo) Cost Behavior; High-Low Method [LO5-10]
Hoi Chong Transport, Limited, operates a fleet of delivery trucks in Singapore. The company knows if a truck is driven 153,000
kilometers during a year, the average operating cost is 12.5 cents per kilometer. If a truck is driven only 102,000 kilometers during a
year, the average operating cost increases to 15.4 cents per kilometer.
Required:
1. Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated with
the fleet of trucks.
2. Express the variable and fixed costs in the form Y = a + bx.
3. If a truck were driven 127,000 kilometers during a year, what total operating cost would you expect to be incurred?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated
with the fleet of trucks.
Note:…
Chapter 2A Solutions
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