Question: High-Low Method, Cost Formulas During the past year, the high and low use of three different resources for Bearskin Airlines occurred in July and April.

High-Low Method, Cost Formulas During the past year, the high and low use of three different resources for Bearskin Airlines occurred in July and April. The resources are airplane depreciation, fuel, and airplane maintenance. The number of airplane flight hours is the driver. The total costs of the three resources and the related number of airplane flight hours are as follows: Airplane Flight Hours Resource Total Cost Airplane depreciation: High 44,000 $18,600,000 Low 28,000 $18,600,000 Fuel: High 44,000 44,616,000 Low 28,000 28,392,000 Airplane maintenance: High 44,000 15,882,000 LOW 28,000 11,684,000 Required: Use the high-low method to answer the following questions. If an answer is zero, enter "0". If required, round your answers to nearest dollar. Use rounded answers in subsequent computations and requirements. 1. What is the variable rate for airplane depreciation? per flight hour What is the fixed cost for airplane depreciation? 2. What is the cost formula for airplane depreciation? 3. What is the variable rate for fuel? per flight hour What is the fixed cost for fuel
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
