Required A. Calculation of average revenue per hour for Each Month And Overall average for 6 Month :
Average revenue per hour = Revenue/ Service Hours
July | August | September | October | November | December | Total | |
Revenue | 6000 | 6800 | 13000 | 21000 | 16000 | 16500 | 79300 |
Service Hours | 120 | 136 | 260 | 420 | 320 | 330 | 1586 |
Average service revenue per hour | 50 | 50 | 50 | 50 | 50 | 50 | 50 |
Hence,
For each month July to December Average service revenue per hour = 50 $ Per Service hour
Overall 6 month Average service revenue per hour = $50 Per Service hour
Required B. Using High Low Method Monthly Fix Cost & Variable Cost calculation :-
Month | Operating Cost | Service Hours | Variable Cost | |||
Oct | high | 11200 | 420 | |||
July | Low | 4300 | 120 | |||
Difference | 6900 | 300 | (6900/300) | 23.00 |
Fixed Cost = Operating Cost in October - (Variable cost per unit * Service hours in October)
= 11200 - (420*23.00)
= 11200 -9660 = 1540
Therefore, Monthly Fix Cost = $1540
Variable Cost Per Hour = $23.00
Required C. Average Contribution margin per hour
Particulars | Amount |
Average Revenue per hour(Calculated in Part A) | 50 |
(Less)Variable cost per hour | 23 |
Average Contribution margin per hour | 27 |
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