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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
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: (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). = Variable cost (slope) Data Table Month Miles Driven Van Operating costs $5,400 15,500 17,500 $5,350 January February March April May 14,400 $4,980 16,400 $5,280 16,900 $5,580 June 15,300 13,500 $5,010 $4,590 July ........ Print Done
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