Hoi Chong Transport, Ltd. operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 123,000 kilometres during a year, the average operating cost is 12.518 cents per kilometre. If a truck is driven only 88,000 kilometres during a year, the average operating cost increases to 16.3 cents per kilometre. (The Singapore dollar is the currency used in Singapore.)

Required:

1. Using the high-low method, estimate the variable and fixed cost elements of the annual cost of truck operation. (Round the "Variable cost" to 5 decimal places. Round "Fixed cost" to 2 decimal places.)

2. Express the variable and fixed costs in the form Y = a + bX. (Round the "Variable cost" to 5 decimal places. Round "Fixed cost" to 2 decimal places.)

3. If a truck were driven 98,000 kilometres during a year, what total cost would you expect to be incurred? (Do not round intermediate calculations. Round "Total annual cost" to 2 decimal places.)