1. Using the high-low method of cost estimation, estimate the behavior of the maintenance costs incurred by Nation’s Capital Fitness, Incorporated. Express the cost behavior pattern in equation form.Note: Round coefficient of X to 2 decimal places and other answer to the nearest whole dollar amount.2.2. Using your answer to requirement 1, what is the variable component of the maintenance cost?Note: Round your answer to 2 decimal places. Required informationPR 6-38 (Algo) High-Low Method; Fitness Centers (LO 6-1, 6-2, 6-5)[The following information applies to the questions displayed below.]Nation's Capital Fitness, Incorporated, operates a chain of fitness centers in the Washington, D.C., area. The firm'scontroller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior patternof the firm's equipment maintenance costs must be determined. The accounting staff has suggested the use of anequation, in the form of Y= a + bx, for maintenance costs. Data regarding the maintenance hours and costs for last yearare as follows:MonthJanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberTotalAverageHours ofMaintenanceService5404902504603504703204104603803503404,820402MaintenanceCosts$ 5,1784,2302,8004,3303,0304,1403,0903,5404,0403,2103,2003,070$ 43,858$ 3,655

The high-low method is used to separate the fixed and variable costs from the mixed costs of…

Using the high-low method of cost estimation, estimate the behavior of the maintenance costs incurred by Nation’s Capital Fitness, Incorporated. Express the cost behavior pattern in equation form. Note: Round coefficient of X to 2 decimal places and other answer to the nearest whole dollar amount. 2. 2. Using your answer to requirement 1, what is the variable component of the maintenance cost? Note: Round your answer to 2 decimal places.

Using the high-low method of cost estimation, estimate the behavior of the maintenance costs incurred by Nation’s Capital Fitness, Incorporated. Express the cost behavior pattern in equation form. Note: Round coefficient of X to 2 decimal places and other answer to the nearest whole dollar amount. 2. 2. Using your answer to requirement 1, what is the variable component of the maintenance cost? Note: Round your answer to 2 decimal places.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 57P: Identifying Fixed, Variable, Mixed, and Step Costs Consider each of the following independent...

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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: Month January February March April May June July August September October November December Total Average Hours of Maintenance Service 520 490 300 500 310 480 Monthly maintenance cost= 320 400 470 350 340 320 4,800 400 Maintenance Costs $ 4,470 4,260 2,820 4,350 2,960 4,200 3,000 3,600 4,050 3,300 3,160 3,030 $43,200 $3,600 Required: 1. Using the high-low method of cost estimation, estimate…
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Required information [The following information applies to the questions displayed below.] Fitness Fanatics is a regional chain of health clubs that evaluates its club managers based on return on investment (ROI). The company's Springfield Club reported the following results for the past year: Sales Net operating income Average operating assets $ 880,000 $ 29,040 $ 100,000 The following questions are to be considered independently. 4. Assume the club manager can reduce average operating assets by $20,000 without any change in sales or net operating income. What would be the club's return on investment (ROI)? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Return on investment (ROI) %
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