During the past year, the high and low use of three different resources for Wilson Trucking occurred
Question:
During the past year, the high and low use of three different resources for Wilson Trucking occurred in July and April. The resources are truck depreciation, fuel, and truck maintenance. The number of kilometres travelled is the driver. The total costs of the three resources and the related number of truck kilometres are as follows:
Required:Use the high-low method to answer the following questions.1. What is the variable rate for truck depreciation? The fixed cost?2.?What is the cost formula for truck depreciation?3.?What is the variable rate for fuel? The fixed cost?4.?What is the cost formula for fuel?5.?What is the variable rate for truck maintenance? The fixed cost?6.?What is the cost formula for truck maintenance?7. Using the three cost formulas that you developed, predict the cost of each resource in a month with 36,000,000 kilometres travelled.
Step by Step Answer:
Cornerstones of Managerial Accounting
ISBN: 978-0176721237
3rd Canadian edition
Authors: Maryanne Mowen, Don Hanson, Dan Heitger, David McConomy, Bradley Witt, Jeffrey Pittman