Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for a Time Period that Differs from the Data Period

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

Assume that this information was used to construct the following formula for monthly delivery cost.

Total Delivery Cost = $41,850 + ($12.00 Number of Deliveries)

Required:

Assume that 3,000 deliveries are budgeted each month for the coming year. Use the total delivery cost formula to make the following calculations:

1. Calculate total variable delivery cost for the coming year. $

2. Calculate total fixed delivery cost for the year. $

3. Calculate total delivery cost for the year. $