1. Johnson Trucking Company wants to determine a fuel surcharge to add to its customers' bills based on the number of miles driven to each area. It wants to separate the fixed and variable portion of the truck's operating costs so it has a better idea of how distance affects these costs. Johnson Trucking Company has the following data available.
|
Month
|
Miles driven
|
Total operating costs
|
|
January
|
16,200
|
$22,650
|
|
February
|
17,000
|
$23,250
|
|
March
|
18,200
|
$24,150
|
|
April
|
16,500
|
$22,875
|
|
May
|
17,400
|
$23,550
|
|
June
|
15,400
|
$22,050
|
Using the high-low method, the monthly operating costs if Johnson Trucking Company drives 20,000 miles in a month will be?
2. All else being equal, a company earns more income by selling low-contribution margin products than by selling an equal number of high-contribution margin products.
True or False