Question: Thornton Computer Services, Inc. has been in business for six months. The following are basic operating data for that period: Required a. What is the

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

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.
d. Use the scatter graph method to estimate the total monthly fixed cost and the variable cost per hour.
e. Compare the results of the two methods and comment on the difference.

Month July Aug. Sept. Oct. Nov. Dec. 330 $6,000 $6,800 $13,000 $21,000 $16,000 $16,500 Operating costs $4,300 $5,300 7100 $11,200 9,100 $10,600 120 136 260 420 320 Service hours Revenue

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a b Fixed cost 11200 23 x 420 1540 or 4300 23 x 120 1540 c Contribution margin per hour 50 ... View full answer

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