Question

Ch. 2: Homework ework Thornton Computer Services, Inc. has been in business for six months. The following are basic operating data for that perio July 120 Service hours 136 320 330 Operating costs $4,300 5,3007,100 $11,200 9.100 $10,600 Required a. What is the average service revenue per hour in each month and the overall average for the six-month period? b. Use the high-low method to estimate the total monthly fixed cost and the variable cost per hour c. Determine the average contribution margin per hour Complete this question by entering your answers in the tabs below. Required A Required B Required C Use the high-low method to estimate the total monthly fixed cost and the variable cost per hour Variable cost i per hour Foxed cost per month Required A Required C > Prex 8 of 8 iii Next MacBook Air 30 0 a Il FS F7

Answer 1

Solution:

b.)

Month		Operating Cost	Service Hours	Variables Cost Per Unit
October	High	$11,200	420
July	Low	$4,300	120
Difference		$6,900	300	$23 per hour

Fixed cost = Operating Cost of October - (Variable cost per unit * Service hours of October )
= $11,200 - ($23*420)
= $1,540 per month