Nation's Capital Fitness, Inc., operates a chain of fitness centers in the Washington, D.C., area. The...

 

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Nation's Capital Fitness, Inc., operates a chain of fitness centers in the Washington, D.C., area. The firm's controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firm's equipment maintenance costs must be determined. The accounting staff has suggested the use of the high-low method to develop an equation, in the form of Y= a + bx, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows: Hours of Maintenance Month January Service 520 Maintenance Costs $ 4,470 February 490 4,260 March 300 2,820 April 500 4,350 May 310 2,960 June 480 4,200 July 320 3,000 August 400 3,600 September 470 4,050 October 350 3,300 November 340 3,160 December 320 3,030 Total 4,800 $43,200 Average 400 $ 3,600 2. Using your answer to requirement 1, what is the variable component of the maintenance cost? (Round your answer to 2 decimal places.) Variable maintenance cost per hour Nation's Capital Fitness, Inc., operates a chain of fitness centers in the Washington, D.C., area. The firm's controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firm's equipment maintenance costs must be determined. The accounting staff has suggested the use of the high-low method to develop an equation, in the form of Y= a + bx, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows: Hours of Maintenance Month January Service 520 Maintenance Costs $ 4,470 February 490 4,260 March 300 2,820 April 500 4,350 May 310 2,960 June 480 4,200 July 320 3,000 August 400 3,600 September 470 4,050 October 350 3,300 November 340 3,160 December 320 3,030 Total 4,800 $43,200 Average 400 $ 3,600 2. Using your answer to requirement 1, what is the variable component of the maintenance cost? (Round your answer to 2 decimal places.) Variable maintenance cost per hour