=+3-23 KK Estimating a cost function, high–low method OBJECTIVE 4 Heli Travel offers a helicopter service from Victorian regional towns to Tullamarine Airport in Melbourne. Each of its 10 helicopters makes between 1000 and 2000 round-trips per year. The records indicate that a helicopter that has made 1000 round-trips in the year incurs an average operating cost of $350 per round-trip, and one that has made 2000 round-trips in the year incurs an average operating cost of $300 per round-trip.

Chapter 3: Determining how costs behave 115 M03_HORN3377_02_LT_C03.indd 115 2/09/13 3:20 PM Required 1 Using the high–low method, estimate the linear relationship y = a + bX, where y is the total annual operating cost of a helicopter and X is the number of round-trips it makes to Tullamarine Airport during the year.