The Controller at Speedy Delivery Wants to Break-Out the Cost

question 50

Essay

The controller at Speedy Delivery wants to break-out the cost of deliveries into fixed and variable components so that they will be better able to predict costs for next year.Below are the delivery cost incurred each month and the number of deliveries.
Required: Using the high-low method:
1.)Calculate the fixed cost of overhead.
2.)Calculate the variable rate per labor hour.
3.)Construct the cost formula for total overhead cost.
4.)The company is estimating that in January the number of deliveries will be 125.How much should they estimate to have in total delivery costs for January?

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Definitions:

Analyze The Situation

The process of examining a situation in detail to understand its components, causes, and potential solutions.

Information Organization

The process of categorizing and arranging data or knowledge in a systematic way to enhance accessibility and usability.

Right Medium

Choosing the most appropriate channel or form of communication to convey a message effectively.

Cultural Idioms

Expressions or phrases that are specific to a particular language or culture, often carrying meanings that are not deducible from the literal words.