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1. Using the High-Low Method

Hector's Delivery Service uses four small vans and six pickup trucks to deliver small packages in the Char- lotte, North Carolina, metropolitan area. Hector spends a considerable amount of money on the gas, oil, and regular maintenance of his vehicles, which is done at a variety of service stations and repair shops. To budget his vehicle expenses for the coming year, he gathers data on his expenses and number of deliveries for each month of the current year.


Total VehicleExpenses

TotalDeliveries

January

$145,329

5,882

February

133,245

5,567

March

123,245

5,166

April

164,295

6,621

May

163,937

6,433

June

176,229

6,681

July

180,553

7,182

August

177,293

6,577

September

155,389

5,942

October

150,832

5,622

November

152,993

5,599

December

201,783

7,433

Required Use the high-low estimation method to determine the relationship between the number of deliv- eries and the cost of maintaining the vehicles.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M91824470

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