Septa Bus Company accumulates the following data concerning a mixed cost, using miles as the activity level. Required:
a. Using the high-low method, determine the cost function for total costs using miles driven as a cost driver, separating the cost into its respective variable cost component and fixed cost component.
b. Prepare a scatter plot for total costs using miles driven as a cost driver using the graph template below.
c. Septa expects that it buses will be driven 12,000 miles in September due to a new route being added. What are the predicted total costs for September?

Question

Septa Bus Company accumulates the following data concerning a mixed cost, using miles as the activity level.  Required: 
a. Using the high-low method, determine the cost function for total costs using miles driven as a cost driver, separating the cost into its respective variable cost component and fixed cost component.
b. Prepare a scatter plot for total costs using miles driven as a cost driver using the graph template below.  
c. Septa expects that it buses will be driven 12,000 miles in September due to a new route being added. What are the predicted total costs for September?

Quizplus · Accepted Answer

The Answer of Septa Bus Company accumulates the following data concerning a mixed cost, using miles as the activity level.  Required: 
a. Using the high-low method, determine the cost function for total costs using miles driven as a cost driver, separating the cost into its respective variable cost component and fixed cost component.
b. Prepare a scatter plot for total costs using miles driven as a cost driver using the graph template below.  
c. Septa expects that it buses will be driven 12,000 miles in September due to a new route being added. What are the predicted total costs for September?

Septa Bus Company Accumulates the Following Data Concerning a Mixed