4. Speedy Parcel Service operates a fleet of delivery trucks in a large metropolitan area. A careful study by the companys cost analyst has determined that if a truck is driven 96,000 miles during a year, the average operating cost is 10.3 cents per mile. If a truck is driven only 64,000 miles during a year, the average operating cost increases to 11.5 cents per mile.

Required:
1.	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 and the "Fixed cost" to the nearest dollar amount.)

Variable cost	$	per mile
Fixed cost	$	per year

2.	Express the variable and fixed costs in the form Y = a + bX. (Round the "Variable cost per mile" to 3 decimal places and the "Fixed cost" to the nearest dollar amount.)

Y =

$

+

$

X

3.	If a truck were driven 80,000 miles during a year, what total cost would you expect to be incurred? (Round the "Variable cost per mile" to 3 decimal places. Round your intermediate and final answers to the nearest dollar amount.)

Total annual cost

$