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Reporting Period (Year) Total Costs Level of Activity (Miles Driven) Year 1 $ 750,000 225,000 Year 2 850,000 240,000 Year 3 1,100,000 430,000 Year 4

Reporting Period (Year) Total Costs Level of Activity (Miles Driven)
Year 1 $ 750,000 225,000
Year 2 850,000 240,000
Year 3 1,100,000 430,000
Year 4 1,150,000 454,000
Year 5 1,250,000 560,000
Year 6 1,550,000 710,000

Scattergraph Method. Refer to the data in the previous exercise for the city of Rockville.

  • [Required] Use the scattergraph method to estimate total fixed costs per year and the variable cost per mile. State your results in the cost equation form Y = f + vX by filling in the dollar amounts for f and v.
  • [Required] What would the estimated costs be if the trucks drove 500,000 miles in year 7?

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