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Kerri Rafferty, owner of Rose Ready, operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a
Kerri Rafferty, 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, Rafferty wants to set the delivery fee based on the distance driven to deliver the flowers. Rafferty 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 16,500 miles. Let's begin by determining the formula that is used to calculate the variable cost (slope). Data table = Variable cost (slope) Month Miles Driven Van Operating Costs January... 15,400 $5,200 February. 17,900 $5,480 March 15,200 $4,980 April 15,800 $5,350 May 16,900 $5,620 June 16,000 $5,300 July 14,500 $4,800 Print Done
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