Using High-Low to Calculate Fixed Cost, Calculate the Variable Rate, and Construct a Cost Function

Speedy Petes is a small start-up company that delivers high-end coffee drinks to large metropolitan office buildings via a cutting-edge motorized coffee cart to compete with other premium coffee shops. Data for the past 8 months were collected as follows:

Month	Delivery Cost	Number of Deliveries
May	$63,450	1,800
June	67,120	2,010
July	66,990	2,175
August	68,020	2,200
September	73,400	2,550
October	72,850	2,630
November	75,450	2,800
December	73,300	2,725

Speedy Petes controller wants to calculate the fixed and variable costs associated with its cutting-edge delivery service.

Required:

1. Using the high-low method, calculate the fixed cost of deliveries.

2. Using the high-low method, calculate the variable rate per delivery.

3. Using the high-low method, construct the cost formula for total delivery cost.

Total Delivery Cost =