Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 111,000 kilometers during a year, the average operating cost is 12.2 cents per kilometer. If a truck is driven only 74,000 kilometers during a year, the average operating cost increases to 14.1 cents per kilometer.

Required:

1. Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated with the fleet of trucks.

2. Express the variable and fixed costs in the form Y = a + bX.

3. If a truck were driven 92,500 kilometers during a year, what total operating cost would you expect to be incurred?

Required 1 Required 2 Required 3 Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated with the fleet of trucks. (Do not round your intermediate calculations. Round the Variable cost per kilometer to 3 decimal places.) Variable cost per kilometer I per year Fixed cost Required 1 Required 2 Required 3 Express the variable and fixed costs in the form Y = a + bX. (Do not round your intermediate calculations. Round the Variable cost per kilometer to 3 decimal places.) Y = Required 1 Required 2 Required 3 If a truck were driven 92,500 kilometers during a year, what total operating cost would you expect to be incurred? (Do not round intermediate calculations.) Total annual cost