the trik per ting ce so t has a better idea ot n nns n Tri kind om any ants 10 d
ID: 2599155 • Letter: T
Question
the trik per ting ce so t has a better idea ot n nns n Tri kind om any ants 10 determine a te s charge to add to its rustomers' blls hased Qn the number ot miles dn en n each area lt wants n s A ate me fixed and warahle par on distance afects these costs Johnson Trucking Company has the tolowing dete available Month Januery February Maich onl May June Miles iven 16,200 17,000 20,000 16,500 174DD 16,000 al operaling costs $22 650 523 250 S25,000 522,875 523 551 $22 000 Using the high low method, the monthly operating costs if Johnson Trucking Company drives 22,000 miles inmonth wil be Round nty intermediary calculations t the nearest cent J A. 510,000 B. 532,0on C. 525,500 D. 524,00DExplanation / Answer
Answer: [C] $26,500
Explanation:
Computation of variable cost per Miles Driven(As per High Low method)-
= Change is cost/Change in Miles Driven
= 25,000-22,000/20,000-16,000
= 3,000/4,000
= 0.75 per miles driven
Computation of Fixed Cost-
= 25,000-(20,000*0.75) = 10,000
If 22,000 Miles in a month, then total cost would be:-
= (22,000*0.75) + 10,000
= 26,500
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