Prompt Parcel Service operates a fleet of delivery trucks in a large metropolitan area. A careful study by the company's cost analyst has determined that if a truck is driven 72,000 kilometres during a year, the average operating cost is 19.0 cents ($0.190) per kilometre. If a truck is driven only 52,000 kilometres during a year, the average operating cost increases to 20.0 cents ($0.200) per kilometre.

Required:1.Using the high-low method, estimate the variable and fixed cost elements of the annual cost of operating a truck if it is driven 72,000 kms.(Round intermediate values to 3 decimal places.)

Variable cost

Fixed cost

2.Express the variable and fixed costs in the formY=a+bX.(Round "Variable cost per kilometre" answer to 3 decimal places.)

Y= _ + _ X

3.If a truck was driven 62,000 kilometres during a year, what total cost would you expect to be incurred?(Round intermediate values to 3 decimal places.)

Total cost: