Linda Horton, an accountant for Trent, Inc., has decided to estimate the fixed and variable components...

 

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Linda Horton, an accountant for Trent, Inc., has decided to estimate the fixed and variable components associated with the company's repair activity. She has collected the following data for the past six months: Repair Hours Total Repair Costs S 800 1,100 10 20 15 12 18 900 900 1,050 1,250 25 Required: a. Estimate the fixed and variable components for the repair costs using the high-low method. Using the cost formula, predict the total cost of repair if 14 hours are used. b. Why is knowledge of cost behaviour important for managerial decision making? Give examples to illustrate your answer. Linda Horton, an accountant for Trent, Inc., has decided to estimate the fixed and variable components associated with the company's repair activity. She has collected the following data for the past six months: Repair Hours Total Repair Costs S 800 1,100 10 20 15 12 18 900 900 1,050 1,250 25 Required: a. Estimate the fixed and variable components for the repair costs using the high-low method. Using the cost formula, predict the total cost of repair if 14 hours are used. b. Why is knowledge of cost behaviour important for managerial decision making? Give examples to illustrate your answer.

Answer rating: 100% (QA)

Solutiona High point 25 repair hours 1250 total repair cost Low point 10 rep... View the full answer