Sandy, the owner of Sunshine Car Wash has found that her income changes depending on the number of cars she washes per month. Sandy wants to predict what her costs are going to be in the future, and has asked you to assist her with some calculations. She has given you the following information for the previous three months: September October November Number of cars washed 1 500 1 900 2 000 Income for the month R61 000 R63 500 R76 000 Required: a) Use the high-low method to calculate the variable cost per unit. b) Use the high-low method to calculate the fixed cost per month c) Use the answers from questions a and b to predict the total cost for December if Sandy washes 2 200 cars.
Sandy, the owner of Sunshine Car Wash has found that her income changes depending on the number of cars she washes per month. Sandy wants to predict what her costs are going to be in the future, and has asked you to assist her with some calculations. She has given you the following information for the previous three months:
September October November
Number of cars washed 1 500 1 900 2 000
Income for the month R61 000 R63 500 R76 000
Required:
a) Use the high-low method to calculate the variable cost per unit.
b) Use the high-low method to calculate the fixed cost per month
c) Use the answers from questions a and b to predict the total cost for December if Sandy washes 2 200 cars.
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