Required information [The following information applies to the questions displayed below.] Nation's Capital Fitness, Inc....
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Required information [The following information applies to the questions displayed below.] Nation's Capital Fitness, Inc. operates a chain of fitness centers in the Washington, D.C., area. The firm's controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firm's equipment maintenance costs must be determined. The accounting staff has suggested the use of the high-low method to develop an equation, in the form of Y a bX, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows: II Hours of Maintenance Maintenance Month Service Costs 4,898 January February March 550 470 4,260 270 2,770 April 480 4,290 May 360 3,000 June 450 4,120 3,040 July August September 360 410 3,540 460 4,020 3,210 3,250 3,100 October 360 November 370 December 360 $43,498 Total 4,900 3,625* Average 408 *Rounded 2. Using your answer to requirement (1), what is the variable component of the maintenance cost? (Round your answer to two decimal places.) Variable maintenance cost per hour 3. Compute the predicted maintenance cost at 680 hours of activity. Maintenance cost
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