A company offers machine rental services for material cutting. Consider the following costs of the...
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Accounting
A company offers machine rental services for material cutting. Consider the following costs of the company over the relevant range of 4,000 to 10,000 hours of operating time for its cutting equipment
Total costs:
4,000 hours
5,000 hours
8,000 hours
10,000 hours
Variable costs
$20,000
?
?
?
Fixed costs
82,000
?
?
?
Total costs
102,000
?
?
?
Cost per hour:
Variable costs
?
?
?
?
Fixed costs
?
?
?
?
Total cost per hour
?
?
?
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A. What is the estimated total cost per hour at a volume of 8,000 hours?
B. What are the estimated total fixed costs at a volume of 10,000 hours?
C. What is the estimated total fixed cost per hour at a volume 8,000 hours?
D. What is the primary advantage of the High-Low method over the cost estimations?
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