Estimate the total fixed cost per month

Reference no: EM13273034

Denburg Company provides information about its activity for the first four months of 2014. The management of the company wants to determine the nature of the costs.

Month Miles Total Cost

January 80,000 $144,000

February 50,000 120,000

March 70,000 141,000

April 90,000 195,000

a) Estimate the variable cost per mile.

b) Estimate the total fixed cost per month.

c) Express a formula to estimate the total costs at other activity levels, defining your terms, and identify any facts assumed by your assumption.

d) What method did you use to make your estimates in "a" and "b" above? Are there any other possible methods that can be used? If so, state the advantages of each.

Reference no: EM13273034

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