HB Haulage is a transport company. The management accountant wants to predict the maintenance costs of...

  

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HB Haulage is a transport company. The management accountant wants to predict the maintenance costs of trucks for the financial year 2022. She budgets a total of 12,000,000 km driven and 2,350,000 tons hauled. She is not sure if km driven or tons hauled is a better predictor of maintenance cost. Explain to her which cost driver you would choose to predict maintenance cost and why (2 marks). Then predict 2022 maintenance costs (3 marks). Actual data retrieved from 2021 records maintenance costs of trucks km driven $ $ $ 2021 January February 4,500 5,500 3,900 6,800 8,000 7,000 March April May $ June $ July $ 6,500 August $ 9,000 September $ 10,000 October 10,500 $ $ 10,000 November December $ 8,500 Total $ 90,200 $ 400,000 530,000 295,000 720,000 790,000 680,000 650,000 910,000 980,000 1,170,000 1,080,000 920,000 9,125,000 tons hauled 82,000 130,000 54,000 120,000 160,000 140,000 100,000 230,000 240,000 205,000 200,000 125,000 1,786,000 HB Haulage is a transport company. The management accountant wants to predict the maintenance costs of trucks for the financial year 2022. She budgets a total of 12,000,000 km driven and 2,350,000 tons hauled. She is not sure if km driven or tons hauled is a better predictor of maintenance cost. Explain to her which cost driver you would choose to predict maintenance cost and why (2 marks). Then predict 2022 maintenance costs (3 marks). Actual data retrieved from 2021 records maintenance costs of trucks km driven $ $ $ 2021 January February 4,500 5,500 3,900 6,800 8,000 7,000 March April May $ June $ July $ 6,500 August $ 9,000 September $ 10,000 October 10,500 $ $ 10,000 November December $ 8,500 Total $ 90,200 $ 400,000 530,000 295,000 720,000 790,000 680,000 650,000 910,000 980,000 1,170,000 1,080,000 920,000 9,125,000 tons hauled 82,000 130,000 54,000 120,000 160,000 140,000 100,000 230,000 240,000 205,000 200,000 125,000 1,786,000