Which of the following items is not considered evidence in determining if a valuation allowance is necessary? a. a cumulative book loss over some period of time. b. management projects future taxable income based on a backlog of signed contracts. c. a net operating loss expired unused in the current year. d. management can implement a tax strategy to create future taxable income, but it will be detrimental to the future profitability of the company.

Exercise 2-12 cost behavior; high-low method [lo2-3, lo2-4] speedy parcel service operates a fleet of delivery trucks in a large metropolitan area. a careful study by the company’s cost analyst has determined that if a truck is driven 120,000 miles during a year, the average operating cost is 11.6 cents per mile. if a truck is driven only 80,000 miles during a year, the average operating cost increases to 13.6 cents per mile. required: 1.& 2. using the high-low method, estimate the variable and fixed cost elements of the annual cost of truck operation. (round the "variable cost per mile" to 3 decimal places.)