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 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.

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 22,000 tour miles are driven.