Revelations 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 120,000 miles during a year, the average operating cost is 11.6 centavos per mile. If a truck is driven only 80,000 miles during a year, the average operating cost increases to 13.6 centavos per mile. 5 points each requirement.

1. Using the high-low method , determine the variable and fixed cost elements of the annual cost of truck operation.

2. Express the variable and fixed costs in the form Y=a+bX

3. If a truck were driven 100,000 miles during a year, what total cost would you expect to be incurred?

Christian Inc. has accumulated the following data for the cost of maintenance on its machinery for the last 4 months :

Month	Maintenance Cost	Machine Hours
September	P26,020	21,000
October	P24,600	18,500
November	P22,300	15,000
December	P25,100	19,000

4. Assuming Christian Company uses the high-low method of analysis, calculate the estimated fixed cost of maintenance

5. Assuming Christian Company uses the high-low method of anaylsysi, if machine hours are budgeted to be 20,000 hours , compute for the budgeted total maintenance cost