Fordson Bank operates a branch in a relatively small rural community. Fordson has a strong...
80.2K
Verified Solution
Link Copied!
Question
Accounting
Fordson Bank operates a branch in a relatively small rural community. Fordson has a strong customer service focus and knows that branch visits can be important in fostering a reputation for good customer service. However, as internet banking increases in popularity, the financial staff at Fordson question whether the costs of the branch are worth it.
As part of looking at the question, a financial analyst has collected monthly data on the number of customer visits to the branch and the operating cost of the branch over the last fiscal year. The data follow:
Month
Customer Visits
Branch Cost
1
962
$ 79,270
2
1,378
101,110
3
1,170
90,190
4
1,014
82,000
5
1,586
112,030
6
1,222
92,920
7
1,144
88,825
8
1,248
94,285
9
1,430
103,840
10
1,040
83,365
11
1,092
86,095
12
1,066
84,730
Estimate the monthly fixed costs and the unit variable cost per customer visit using the high-low estimation method.
branch cost = ____+______ per visit x customer visits
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
