Nation's Capital Fitness, Inc. operates a chain of fitness centers in the Washington, D.C., area. The firm's
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1. Using the high-low method of cost estimation, estimate the behavior of the maintenance costs incurred by Nation's Capital Fitness, Inc. Express the cost behavior pattern in equation form.
2. Using your answer to requirement (1), what is the variable component of the maintenance cost?
3. Compute the predicted maintenance cost at 590 hours of activity.
4. Compute the variable cost per hour and the fixed cost per hour at 600 hours of activity. Explain why the fixed cost per hour could be misleading.
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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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