Question 2 (a) and (b)

(a) Explain the following terms with example(s) and/or relevant graph: i. Variable cost. (3 marks) ii. Fixed cost. (3 marks) iii. Semi variable cost. (3 marks) (b) Brakes Transport Co. operates a fleet of delivery trucks in Singapore. The costing department of this company has determined that if a truck has driven 220,000 kilometers (km) during a year, the average operating cost is 21.5 cents per km. If a truck is driven only 100,000km during a year, the average operating cost increases by 10.2 cents per km. (The Singapore dollar (\$) is the currency used in Singapore)