Tripton Ltd operates a package holiday company in Cardiff. The company has a reliable budgeting process from which the following information has been obtained:
|Sales of holidays (units)||500||800||1000|
|Repairs and maintenance||40,000||64,000||80,000|
|Depreciation on office equipment||20,000||20,000||20,000|
(a) Using the high-low method, calculate the linear cost equation in the form Y = a+bx for each semi-variable cost included in the budget above.
(b) Using the linear cost equations, where appropriate, prepare the total budget for the month of August. The company is expecting to make sales of 1,400 holidays.
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