1. High-Low Method.The town of Quincy reported the following annual cost data for maintenance work performed on its fleet of trucks.
2. Reporting Period (Year)Total CostsLevel of Activity (Miles Driven)Year 1$750,000225,000Year 2850,000240,000Year 31,100,000430,000Year 41,150,000454,000Year 51,250,000560,000Year 61,550,000710,000
3. Required:
4. Use the four steps of 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 by filling in the dollar amounts forfandv.
5. What would the estimated costs be if the trucks drove 600,000 miles in year 7?