Newteh Computer Services, Inc., has been in business for six months. The following are basic operating data

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Newteh Computer Services, Inc., has been in business for six months. The following are basic operating data for that period. 

Month Aug. Sept. Oc. Dec. July Nov. Service hours Revenue Operating costs 120 136 420 320 260 330 $6,000 $4,300 $6,800 $

.:.

Required

a. What is the average service revenue per hour for the six-month time period?

b. Use the high-low method to estimate the total monthly fixed cost and the variable cost per hour.

c. Determine the average contribution margin per hour.

d. Use the scattergraph method to estimate the total monthly fixed cost and the variable cost per hour.

e. Compare the results of the two methods and comment on the difference. 

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
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