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Roy Travel offers helicopter service from suburban towns to John F. Kennedy International Airport in New York City. Each of its 12 helicopters makes between

Roy Travel offers helicopter service from suburban towns to John F. Kennedy International Airport in New York City. Each of its 12 helicopters makes between 1,200 and 1,700 round-trips per year. The records indicate that a helicopter that has made 1,200 round-trips in the year incurs an average operating cost of $900 per round-trip, and one that has made 1,700 round-trips in the year incurs an average operating cost of $700 per round-trip.

1.

Using the high-low method, estimate the linear relationship y=a+bX, where y is the total annual operating cost of a helicopter and X is the number ofround-trips it makes to JFK airport during the year.

2.

Give examples of costs that would be included in a and in b.

3.

If Roy Travel expects each helicopter to make, on average,1,500 round-trips in the coming year, what should its estimated operating budget for the helicopter fleet be?

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