Kate Coughlin, owner of Flowers 4 You, operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a flat delivery fee, Coughlin wants to set the delivery fee based on the distance driven to deliver the flowers. Coughlin 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 Flowers 4 You's cost equation for van operating costs. Use your results to predict van operating costs at a volume of 16,500 miles. 1 Let's begin by determining the formula that is used to calculate the variable cost (slope). - Data Table X Change in cost Change in volume = Variable cost (slope) Now determine the formula that is used to calculate the fixed cost component. Month Miles Driven Total operating cost - Total variable cost = Fixed cost January ............... 15,400 17,900 February............... Use the high-low method to determine Flowers 4 You's operating cost equation. (Round the variable cost to 15,200 y=$ O x+$ O March.............. April ......... Van Operating Costs $5,200 $5,480 $4,980 $5,350 $5,620 $5,300 15,800 16,900 May .................. June.................. 16,000 Enter any number in the edit fields and then click Check