Question: Solomon Computer Services, Inc. has been in business for six months. The following are basic operating data for that period: Month July Aug Sept Oct

Solomon Computer Services, Inc. has been in business for six months. The following are basic operating data for that period:

Month July Aug Sept Oct Nov Dec
Service hours 120 132 254 426 320 332
Revenue $ 7,080 $ 7,788 $ 14,986 $ 25,134 $ 18,880 $ 19,588
Operating costs $ 4,200 $ 5,240 $ 7,110 $ 11,160 $ 9,150 $ 10,540

Required

a. What is the average service revenue per hour in each month and the overall average for the six-month period?

b. Use the high-low method to estimate the total monthly fixed cost and the variable cost per hour.

c. Determine the average contribution margin per hour.

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