Question
High-Low Method. The city of Rockville reported the following annual cost data for maintenance work performed on its fleet of trucks. Reporting Period (Year) Total
High-Low Method. The city of Rockville reported the following annual cost data for maintenance work performed on its fleet of trucks.
Reporting Period (Year) | Total Costs | Level of Activity (Miles Driven) |
Year 1 | $ 750,000 | 225,000 |
Year 2 | 850,000 | 240,000 |
Year 3 | 1,100,000 | 430,000 |
Year 4 | 1,150,000 | 454,000 |
Year 5 | 1,250,000 | 560,000 |
Year 6 | 1,550,000 | 710,000 |
[Required] Use the high-low method to estimate total fixed costs per year and the variable cost per mile. State your results in the cost equation form Y = f + vX.
[Required] What would the estimated costs be if the trucks drove 500,000 miles in year 7?
Scattergraph Method. Refer to the data in the previous exercise for the city of Rockville.
[Required] Use the scattergraph method to estimate total fixed costs per year and the variable cost per mile. State your results in the cost equation form Y = f + vX by filling in the dollar amounts for f and v.
[Required] What would the estimated costs be if the trucks drove 500,000 miles in year 7?
Regression Analysis. Regression analysis was run using the same data for the city of Rockville.
[Required] Use the regression output to develop the cost equation Y = f + vX by filling in the dollar amounts for f and v.
[Required] What would the city of Rockvilles estimated costs be if its trucks drove 500,000 miles in year 7?
ANSWER ALL OF THEM
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