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Exercise 2-12 Cost Behavior, High-Low Method [LO2-3, Lo2-4) Speedy Parcel Service operates a feet of delivery trucks in a large metropoitan area. A careful study
Exercise 2-12 Cost Behavior, High-Low Method [LO2-3, Lo2-4) Speedy Parcel Service operates a feet of delivery trucks in a large metropoitan area. A careful study by the companys cost enalyst has determined that if a truck is driven 120,000 miles during a yeer, the average operating cost is 11.6 cents per mile. If a truck is driven only 80,000 miles during a year, the average operating cost increases to 136 cents per mile. Required: 1& 2.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.) 3 Answer is not complete. Total Annual Cost Miles Driven High level of activity Low level of actvity Change 120,000 S 1392,000 0 60,000 O 40,000 s 1392,000 Variable cost per per unt mle Fixed cost per year 3. If a truck were driven 100,000 miles during a year, what total cost would you expect to be incurred
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