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Acme Company keeps detailed records of their maintenance truck expense per month. In April the truck was operated for 20,000 kms and cost $6,000 to
Acme Company keeps detailed records of their maintenance truck expense per month. In April the truck was operated for 20,000 kms and cost $6,000 to maintain. In May the truck was operated for 30,000 kms and cost $8,400 to maintain. Show all your calculations for the following questions. a) Using the high-low method calculate the fixed and variable portion of maintenance expense for the truck (5 marks) b) What is the cost formula for the maintenance expense? (2.5 marks) c) Using the formula in part (b) estimate the truck expense for June if the truck is expected to go 70,000 kms. (2.5 marks)
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