Rolling Hills Golf Association is a nonprofit, private organization that operates three 18-hole golf courses north of
Question:
1. A fixed component of $12,000 per month (when the courses are open).
2. A step-variable cost component. For each additional 1 to 10 people teeing off in one day, $20 in costs are incurred. Thus, if 101 to 110 people tee off, $220 of additional cost will be incurred. If 111 to 120 people tee off, $240 of additional cost will be incurred.
Required:
1. Draw a graph of Rolling Hills Golf Association's course maintenance costs. Show on the graph the fixed-cost component and the step-variable cost component. Label each clearly.
2. Use a semi variable-cost behavior pattern to approximate the golf association's course maintenance cost behavior. Visually fit the semi variable cost line to your graph.
3. Using your graph, estimate the variable- and fixed-cost components included in your semi variable approximation. Express this approximate cost behavior pattern in equation form.
4. Fill in the following table of cost predictions.
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Related Book For
Managerial Accounting Creating Value in a Dynamic Business Environment
ISBN: 978-0078110917
9th edition
Authors: Ronald W. Hilton
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