Question
In: Accounting
Changing the Cost Formula for a Month to the Cost Formula for a Year During the...
Changing the Cost Formula for a Month to the Cost Formula for a Year During the past year, the high and low use of three different resources for Fly High Airlines occurred in July and April. The resources are airplane depreciation, fuel, and airplane maintenance. The number of airplane flight hours is the driver. The total costs of the three resources and the related number of airplane flight hours are as follows:
| Resource | Airplane Flight Hours | Total Cost |
|---|---|---|
| Airline Depreciation: | ||
| High | 44,000 | $18,100,000 |
| Low | 28,000 | $18,100,000 |
| Fuel: | ||
| High | 44,000 | 445,896,000 |
| Low | 28,000 | 283,752,000 |
| Airplane maintenance: | ||
| High | 44,000 | 15,976,000 |
| Low | 28,000 | 12,080,000 |
Required:
If required, round calculations and answers to nearest dollar.
1. Develop an annual cost formula for airplane depreciation.
Total annual cost of airplane depreciation = ____ x ($__________)
Develop an annual cost formula for fuel.
Total annual cost of fuel = $_________×___________
Develop an annual cost formula for airplane maintenance.
Total annual cost of airplane maintenance = (___________x $___________) + ($__________×_____________)
2. Using the three annual cost formulas that you developed, predict the cost of each resource in a year with 487,000 airplane flight hours.
Total annual cost of airplane depreciation $
Total annual cost of fuel $
Total annual cost of airplane maintenance $
Solutions
Expert Solution
| 1) annual total cost of airplane depreciation = 12*18100000 |
| variable cost of fuel = (445896000/44000) = 10134 |
| total annual cost of fuel = 10134*annual no of airplane flight hours |
| airplane maintenance variable cost = (15976000-12080000)/(44000-28000) |
| airplane maintenance variable cost = 243.5 |
| airplane maintenance fixed cost = total cost-variable cost |
| airplane maintenanxe fixed cost = (15976000-44000*243.5) |
| airplane maintenancce fixed cost = 5262000 |
| annual cost formula = (5262000*12)+(243.5*annual no of airplane flight hrs) |
| 2) total annual cost of airplane depreciation = 12*18100000 = 217200000 |
| total annual cost of fuel = 10134*487000 = 4935258000 |
| total annual cost of airplane maintenance = (12*5262000)+(487000*243.5) |
|
total annual cost of airplane maintenance = 181728500 |
Please give a thumbs up if it is helpful & let me know if any doubt
ekkarill92 answered 1 year agoRelated Solutions
Changing the Cost Formula for a Month to the Cost Formula for a Year During the...
Changing the Cost Formula for a Month to the Cost Formula for a
Year
During the past year, the high and low use of three different
resources for Fly High Airlines occurred in July and April. The
resources are airplane depreciation, fuel, and airplane
maintenance. The number of airplane flight hours is the driver. The
total costs of the three resources and the related number of
airplane flight hours are as follows:
Resource
Airplane Flight
Hours
Total Cost
Airplane depreciation:...
Ohme Framing's cost formula for its supplies cost is $1,620 per month plus $13 per frame....
Ohme Framing's cost formula for its supplies cost is $1,620 per
month plus $13 per frame. For the month of April, the company
planned for activity of 882 frames, but the actual level of
activity was 878 frames. The actual supplies cost for the month was
$13,500. The supplies cost in the flexible budget for April would
be closest to:
The production cost of x units of a product during a month is x ^ 2...
The production cost of x units of a product during a month is x
^ 2 dollars. If you want to produce at least 80 units over the next
three months, formulate and solve a nonlinear programming model to
determine the most economical way to produce.
During the month of July, direct labour cost totalled $24,000 and direct labour cost was 30%...
During the month of July, direct labour cost totalled $24,000
and direct labour cost was 30% of prime cost. If total
manufacturing costs during June were $105,000, the manufacturing
overhead was:
During the month of January, Sundown Corporation had sales of $580,000 and a cost of goods...
During the month of January, Sundown Corporation had sales of
$580,000 and a cost of goods available for sale of $1,160,000. The
company consistently earns a gross profit rate of 49%. Using the
gross profit method, the estimated inventory at January 31 amounts
to:
$295,800.
$864,200.
$284,200.
$875,800.
dfgasdsgsf32414123435315 The following data show the cost of electricity (in RM) during a summer month for...
dfgasdsgsf32414123435315
The following data show the cost of electricity (in RM) during
a summer month for a random sample of 30 one-bedroom apartments in
a large city.
17.5
33.7
31.9
21.7
19.1
19.6
20.9
39.7
36.5
21.7
29.7
19.9
33.2
35.7
20.7
27.8
32.8
19.7
14.5
27.2
15.7
15.2
23.6
24.2
26.8
21.6
13.9
42.5
14.7
35.1
a)Construct a frequency
distribution.
b)Using the result from part (i),
calculate the relative frequencies for each class.
c)Using the result from part...
The cost of goods sold during the year was $281200. Inventory increased by $9000 during the...
The cost of goods sold during the year was $281200. Inventory
increased by $9000 during the year and accounts payable decreased
by $14100 during the year. Using the direct method of reporting
cash flows from operating activities, cash payments for inventory
total
$295300.
$304300.
For Eckstein Company, the predetermined overhead rate is 134% of direct labor cost. During the month,...
For Eckstein Company, the predetermined overhead rate is 134% of
direct labor cost. During the month, Eckstein incurred $101,000 of
factory labor costs, of which $80,600 is direct labor and $20,400
is indirect labor. Actual overhead incurred was $113,004. Compute
the amount of manufacturing overhead applied during the month.
In Crawford Company, the predetermined overhead rate is 80% of direct labor cost. During the month,...
In Crawford Company, the predetermined overhead rate is 80% of
direct labor cost. During the month, Crawford incurs $210,000 of
factory labor costs, of which $180,000 is direct labor and $30,000
is indirect labor. Actual overhead incurred was $200,000. The
amount that the overhead applied was overapplied or underapplied
was:
Group of answer choices
$56,000 overapplied
$32,000 overapplied
$56,000 underapplied
$32,000 underapplied
Dubberly Corporation's cost formula for its manufacturing overhead is $32,400 per month plus $54 per machine-hour....
Dubberly Corporation's cost formula for its manufacturing
overhead is $32,400 per month plus $54 per machine-hour. For the
month of March, the company planned for activity of 7,880
machine-hours, but the actual level of activity was 7,790
machine-hours. The actual manufacturing overhead for the month was
$482,490.
The spending variance for manufacturing overhead in March would
be closest to:
A)29,430 U
B)24,570 F
C)29,430
D)24,570 U
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Explain at least three reasons why there are so many divisions / denominations in the Christian...
- COSC 1436 Programming Assignment : Skill Practice Assignment 3 Your skill practice assignment this week will...
- Waste elimination and process improvement can be applied to virtually any process. Identify a process at...
- Do you think the FASB should continue to require the Statement of Cash Flows or are...
- Here is your chance to analyze an actual co-worker conflict situation and make suggestions on how...
- McKinsey Machines Ltd manufactures a single product A. It has two cost centers namely molding department...
- Threads: Assume a multithreaded application using user level threads mapped to a single kernel level thread...
ADVERTISEMENT