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Kallie Meyer, owner of Tulip Time, operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a flat
Kallie Meyer, owner of Tulip Time, operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a flat delivery fee, Meyer wants to set the delivery fee based on the distance driven to deliver the flowers. Meyer 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: (Click the icon to view the data.) Use the high-low method to determine Tulip Time's cost equation for van operating costs. Use your results to predict van operating costs at a volume of 17,000 miles. ... Let's begin by determining the formula that is used to calculate the variable cost (slope). = Variable cost (slope) Now determine the formula that is used to calculate the fixed cost component. Fixed cost Use the high-low method to determine Tulip Time's operating cost equation. (Round the variable cost to the nearest cent and the fixed cost to the nearest whole dollar.) y = X + Use the operating cost equation you determined above to predict van operating costs at a volume of 17,000 miles. The operating costs at a volume of 17,000 miles is Data table Month January .... February March Miles Driven Van Operating costs 15,900 $5,420 18,000 $5,460 15,300 $5,100 $5,290 16,300 17,000 $5,520 April May June July .. 15,700 $5,150 15,000 $4,950
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