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Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 105,000 kilometers during
Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 105,000 kilometers during a year, the average operating cost is 11.4 cents per kilometer. If a truck is driven only 70,000 kilometers during a year, the average operating cost increases to 13.4 cents per kilometer. Required: Using the high-low method, estimate the variable and fixed cost elements of the annual cost of the truck operation. (Do not round your information evolutions. Round the variable cost) Express the variable and fixed costs in the form Y = s + oX. (Do not round your intermediate. Round the variable cost per kilometer to 3 decimal places.) If a truck were driven 80,000 kilometers during a year, where total cost would you express be incurred? (Do not round intermediate calculations.)
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