Question
Rio's 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
Rio's Bus Tours has incurred the following bus maintenance costs during the recent tourist season. (Therealis Brazil's national monetary unit. On the day this exercise was written, therealwas equivalent in value to .269 U.S. dollar.)
MonthMiles Traveled by Tour Buses Costs
November14,250$18,100 real
December16,900$18,400
January19,550$18,550
February23,500$19,000
March31,000$19,660
April13,000$17,500
1.Using the high-low method to estimate, what would be the variable cost per tour mile traveled and the fixed cost per month.
2.What would be a formula to express the cost behavior exhibited by the company's maintenance cost.
3.What prediction level of maintenance cost would be incurred during a month when 39,000 tour miles are driven.
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