FIX RED

Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 156,000 kilometers during a year, the average operating cost is 12.6 cents per kilometer. If a truck is driven only 104,000 kilometers during a year, the average operating cost increases to 15.6 cents per kilometer. Required: Using the high-low method, estimate the variable and fixed cost elements of the annual cost of the truck operation. Express the variable and fixed costs in the form Y = a + bX