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I have tried a couple of things, and got $2025 + $0.19, although it is wrong. Kathy Battle, owner of Rose Ready, operates a local
I have tried a couple of things, and got $2025 + $0.19, although it is wrong.
Kathy Battle, owner of Rose Ready, operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a flat delivery fee, Battle wants to set the delivery fee based on the distance driven to deliver the flowers. Battle wants to separate the fixed and variable portions of her van operating costs so that she has a better idea how delivery distance affects these costs. She has the following data from the past seven months: E: (Click the icon to view the data.) Use the high-low method to determine Rose Ready's cost equation for van operating costs. Use your results to predict van operating costs at a volume of 16,000 miles. Let's begin by determining the formula that is used to calculate the variable cost (slope). Data Table Change in cost Change in volume = Variable cost (slope) Now determine the formula that is used to calculate the fixed cost component. Total operating cost Total variable cost Fixed cost Month Miles Driven 15,500 Use the high-low method to determine Rose Ready's operating cost equation. (Round the variable cost to the nearest cent and the fixed cost to the nearest whole dollar.) January February ... March Van Operating Costs $5,400 $5,350 $4,980 17,500 y = X + 14,400 April 16,400 $5,280 May 16,900 $5,580 June 15,300 $5,010 July 13,500 $4,590 Print Done DoneStep by Step Solution
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