Rio Bus Tours has incurred the following bus maintenance costs during the recent tourist season. (The real is Brazils national monetary unit. On the day this exercise was written, the real was equivalent in value to 0.2545 U.S. dollar.)

Month Miles Traveled by Tour Buses Cost

November 15,450 18,900 real

December 17,700 19,200

January 19,950 19,350

February 24,300 19,800

March 31,800 21,000

April 13,800 18,300

Required:

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

2. Develop a formula to express the cost behavior exhibited by the companys maintenance cost.

3. Predict the level of maintenance cost that would be incurred during a month when 47,000 tour miles are driven.