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frosja888 [35]
3 years ago
10

Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is drive

n 177,000 kilometers during a year, the average operating cost is 12.3 cents per kilometer. If a truck is driven only 118,000 kilometers during a year, the average operating cost increases to 15.5 cents per kilometer.
Required:
a. Using the high-low method, estimate the variable and fixed cost elements of the annual cost of the truck operation.
b. Express the variable and fixed costs in the form Y = a + bX.
c. If a truck were driven 147,000 kilometers during a year, what total cost would you expect to be incurred?
Business
1 answer:
viva [34]3 years ago
4 0
The answer is option a
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All else being equal, a company with a low operating leverage will have:
nlexa [21]

Answer:

c) relatively high variable costs

Explanation:

Operating leverage is a ratio that is used to analyze and understand the cost structure of a business. It gives the relation between the variable and fixed cost to the the total cost of running the business.

A business with a large amount of fixed cost relative to variable is said to have  a high operating leverage . For such business, operating income would  be more volatile because the operating income would not increase in commensurate proportion as sales revenue.

And a company with low operating leverage has low amount of fixed cost relative to variable cost and therefore a relatively high variable costs

Operating leverage is calculated as

Contribution /Earnings before interest  and Tax

5 0
3 years ago
A Chinese company exchanges yuan (Chinese currency) for dollars. It uses these dollars to purchase scrap metal from a U.S. compa
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Answer:

d. decrease, and U.S. net capital outflow increases.

Explanation:

Yuan is the currency of the country China and the currency of United States of America is dollar. Every country in the world does imports of some goods to meet the demands of the country and exports some items to the other countries that is produced in abundance in the parent country. In this way, countries earn huge capital by doing importing and exporting.

In the context, China will buy scrap metal from United States, thus China is importing a good from U.S. So China will have more of import. Hence China net export will decrease. While U.S. is selling goods to China in exchange of dollar and earning capital. So, net capital outflow of the United States will increase.

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Jessica is a violinist who believes she can extend her method of learning music to early childhood education. She opens a presch
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3 years ago
Read 2 more answers
4. Each year, Holly's Best Salad Dressing, Inc. (HBSD) purchases 50,000 gallons of extra virgin olive oil. Ordering costs are $1
Norma-Jean [14]

Answer:

HBSD should take the discount because it will

lead to as savings of  $1,120.00  

Explanation:

step 1

<em>Determine the the inventory cost of EOQ</em>

EOQ =√ (2× Co× D)/Ch

= √(2× 100× 50,000)/ 80% × $0.50

= 5,000 units

Inventory cost = Purchase cost + Ordering cost + carrying cost

                                                                     $

Purchase cost = 50,000 × $0.50   =   25,000.00

Ordering cost   = (50,000/5000)× 100  = 1,000

carrying cost  =  (5000/2) × $0.50 × 80% = <u>1,000</u>

Total cost                                                   <u>27,000.</u>

Step 2

<em>Determine the inventory cost for order of 10,000 gallons</em>

Order of 10,000 gallons

Purchase cost = $(0.50-0.03) × 50,000      = 23,500.

Ordering cost = (50,000/10,000) × 100   =          500

Carrying cost = (10000/2) × $(0.50-0.03)× 80%  =<u>1880</u>

Total cost                                                          <u>   25,880.</u>

Step 3

<em>Compare the cost under the two options</em>

HBSD should take the discount because it will

lead to as savings of  $1,120.00   i.e (927,000 - 25,880.)

                   

6 0
3 years ago
10. Suppose the world price of coffee is $3 per pound and Brazil’s domestic price of coffee without trade is $2 per pound. If Br
aleksklad [387]

Answer:

no

Explanation:

no ondjdjskaoaoskkd

6 0
2 years ago
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