Reference no: EM132521587

Resource                Airplane Flight                Total Cost

Hours

Airplane depreciation:

High                            44,000                 $ 18,600,000

Low                            28,000                 $ 18,600,000

Fuel:

High                            44,000                 445,896,000

Low                             28,000                 283,752,000

Airplane maintenance:

High                              44,000                    15,952,000

Low                               28,000                      12,168,000

Required:

Use the high-low method to answer the following questions. If an answer is zero, enter "0". If required, round your answers to nearest dollar.

Question 1. What is the variable rate for airplane depreciation?

What is the fixed cost for airplane depreciation?

Question 2. What is the cost formula for airplane depreciation?

Total cost of airplane depreciation = $

Question 3. What is the variable rate for fuel?

$ per flight hour

What is the fixed cost for fuel?

Question 4. What is the cost formula for fuel?

Total cost of fuel = $ x Number of airplane flight hours

Question 5. What is the variable rate for airplane maintenance?

$ per flight hour

What is the fixed cost for airplane maintenance?

Question 6. What is the cost formula for airplane maintenance?

Total cost of airplane maintenance = $

+ ( $ × Number of airplane flight hours)

Question 7. Using the three cost formulas that you developed, predict the cost of each resource in a month with 36,000 airplane flight hours. (Note: Do not round intermediate calculations.)