Item$2$

Item $2$

Amarjit Truckers, Ltd$.$ operates a fleet of delivery trucks in North America. The company has determined that, if a truck is driven $130,000$ kilometres during a year, the average operating cost is $18\mathrm{.}000$ cents per kilometre. If a truck is driven only $54,000$ kilometres during a year, the average operating cost increases to $21\mathrm{.}0$ cents per kilometre.

Required:

$1.$ Using the high$-$low method, estimate the variable and fixed cost elements of the annual cost of truck operation. $($Do not round intermediate calculations. 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$.($Do not round intermediate calculations. Round the "Variable cost" to $5$ decimal places. Round "Fixed cost" to $2$ decimal places.$)$

$3.$ If a truck were driven $86,000$ 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.$)$