Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Amarjit Truckers, Ltd . operates a fleet of delivery trucks in North America. The company has determined that, if a truck is driven 1 3

Amarjit Truckers, Ltd. operates a fleet of delivery trucks in North America. The company has determined that, if a truck is driven 135,000 kilometres during a year, the average operating cost is 15.000 cents per kilometre. If a truck is driven only 56,000 kilometres during a year, the average operating cost increases to 18.0 cents per kilometre.
Required:
1. Using the high-low method, estimate the variable and fixed cost elements of the annual cost of truck operation. (Do not round intermediate calculations. Round the "Variable cost" to 5 decimal places. Round "Fixed cost" to 2 decimal places.)
2. Express the variable and fixed costs in the form Y = a + bX.(Do not round intermediate calculations. Round the "Variable cost" to 5 decimal places. Round "Fixed cost" to 2 decimal places.)
3. If a truck were driven 89,000 kilometres during a year, what total cost would you expect to be incurred? (Do not round intermediate calculations. Round "Total annual cost" to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Financial Accounting And Reporting

Authors: Ciaran Connolly

2nd Edition

0903854724, 978-0903854726

More Books

Students also viewed these Accounting questions