Raburt Travel offers helicopter service from suburban towns to John F. Kennedy International Airport in New York City. Each of its 6 helicopters makes between 900 and 1,800 round-trips per year. The records indicate that a helicopter that has made 900 round-trips in the year incurs an average operating cost of $385 per round-trip, and one that has made 1,800 round-trips in the year incurs an average operating cost of $250 per round-trip.

Requirements

1. Using the high-low method, estimate the linear relationship y = a + bX, where y is the total annual operating cost of a helicopter and X is the number of round-trips it makes to JFK airport during the year.

2. Give examples of costs that would be included in a and in b.

3. If Rabuet Travel expects each helicopter to make, on average, 1,300 round-trips in the coming year, what should its estimated operating budget for the helicopter fleet be?

Requirement 1. Using the high-low method, estimate the linear relationship y = a + bX, where y is the total annual operating cost of a helicopter and X is the number of round-trips it makes to JFK airport during the year.

=

+

Requirement 2. Give examples of costs that would be included in a and in b.

Begin by selecting which type of costs "a" and "b" represent, then select the costs that correlate with that cost type, use each cost only once.

Requirement 3. If Rabuet Travel expects each helicopter to make, on average, 1,300 round-trips in the coming year, what should its estimated operating budget for the helicopter fleet be?

Rabuet Travel's estimated operating budget for all 6 helicopters in the fleet combined should be $.