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A Transport, Ltd., operate a fleet of delivery trucks in Hong Kong. The company has determined that if a truck is driven 105,000 kilometers during
A Transport, Ltd., operate a fleet of delivery trucks in Hong Kong. The company has determined that if a truck is driven 105,000 kilometers during a year, the average operating cost is 11.4 cents per kilometer. If a truck is driven only 70,000 kilometers during a year, the average operating cost increases to 13.4 cents per kilometer. (The Hong Kong dollar is the currency used in Hong Kong.) 1. Using the high-low method, estimate the variable and fixed cost elements of the annual cost of the truck operation. 2. Express the variable and fixed costs in the form Y=a+bX. 3. If a truck were driven 80,000 kilometers during a year, what total cost would you expect to be incurred
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