Required information

PR $6-38($Algo$)$ High$-$Low Method; Fitness Centers $($LO $6-1,6-2,6-5)$

$[$The following information applies to the questions displayed below.$]$

Nation's Capital Fitness, Incorporated, 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 an equation, in the form of $\backslash ($ Y$=\backslash$mathrm$\{$a$\}+\backslash$mathrm$\{$b$\}$ X $\backslash ),$ for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows:

PR $6-38($Algo$)$ Part $4$ Compute the variable cost per hour and the fixed cost per hour...

$4-$a$.$ Compute the variable cost per hour and the fixed cost per hour at $650$ hours of activity.

$4-$b$.$ Why is the fixed cost per hour possibly misleading?

Complete this question by entering your answers in the tabs below.

Why is the fixed cost per hour possibly misleading?

Why is the fixed cost per hour possibly misleading?