Rio Bus Tours has incurred the following bus maintenance costs during the recent tourist season. (The

real is Brazil's national monetary unit. On the day this exercise was written, the real was equivalent in

value to .5379 U.S. dollar.)

Month

Miles Traveled

by Tour Buses Cost

November ........................................................... 8,500 ............................................................. 11,400 real

December .......................................................... 10,600 .............................................................. 11,600

January .............................................................. 12,700 .............................................................. 11,700

February ............................................................. 15,000 .............................................................. 12,000

March ................................................................ 20,000 .............................................................. 12,500

April ................................................................... 8,000 ............................................................. 11,000

Required:

1. Use the high-low method to estimate the variable cost per tour mile traveled and the fixed cost per

month.

3. Predict the level of maintenance cost that would be incurred during a month when 22,000 tour

miles are driven. (Remember to express your answer in terms of the real. )