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Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
Edition 6ISBN: 978-1305103962Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
Edition 6ISBN: 978-1305103962 Exercise 36
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:
Refer to the information for Fly High Airlines above.
Required:
1. Develop annual cost formulas for airplane depreciation, fuel, and airplane maintenance.
2. Using the three annual cost formulas that you developed, predict the cost of each resource in a year with 480,000 airline flight hours.
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:
Refer to the information for Fly High Airlines above.
Required:
1. Develop annual cost formulas for airplane depreciation, fuel, and airplane maintenance.
2. Using the three annual cost formulas that you developed, predict the cost of each resource in a year with 480,000 airline flight hours.
Explanation
Verified
Verified
High-low method:
Under this method, the...
Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
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