6-25 Brazilia Bus Tours has incurred the following bus maintenance costs during the recent tourist season. (The real is Brazils national monetary unit. On the day this exercise was written, the real was equivalent in value to .5092 U.S. dollar.)

Required:

1. Use the high-low method to estimate the variable cost per tour mile traveled and the fixed cost per month.

2. Develop a formula to express the cost behavior exhibited by the companys maintenance cost.

3. Predict the level of maintenance cost that would be incurred during a month when 34,000 tour miles are driven. (Remember to express your answer in terms of the real. )

4. Build a spreadsheet: Construct an Excel spreadsheet to solve all of the preceding requirements. Show how the solution will change if the following information changes: in March there were 32,000 miles traveled and the cost was 20,000 real.

Month November December January February March April Miles Traveled by Tour Buses 12,750 15,900 19,050 22,500 30,000 12,000 Maintenance Cost 17,100 real 17,400 17,550 18,000 18,750 16,500