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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 107,000 kilometers during
Hoi Chong Transport, Ltd. operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 107,000 kilometers during a year, the average operating cost is 7.2 dollars per kilometer. If a truck is driven only 50,000 kilometers during a year, the average operating cost increases to 13.4 dollars per kilometer. (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 2. Express the variable and fixed costs in the form Y = a + bx. 3. If a truck were driven 73,000 kilometers during a year, what total cost would you expect to be incurred
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