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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
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 0.2545 U.S. dollar.) Month November Miles Traveled by Tour Buses 14,850 Cost 18,500 real December 17,300 18,800 January 19,750 18,950 February 23,900 19,400 March 31,400 20,150 April 13,400 17,900 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 company's maintenance cost. 3. Predict the level of maintenance cost that would be incurred during a month when 43,000 tour miles are driven.
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