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We Deliver operates a fleet of delivery trucks in Halifax. Analysis shows that if a truck is driven 150,000 kilometres during a year, the average
We Deliver operates a fleet of delivery trucks in Halifax. Analysis shows that if a truck is driven 150,000 kilometres during a year, the average operating cost is 12.1 cents ( $0.121) per kilometre. If a truck is driven only 85,000 kilometres during a year, the average operating cost increases to 14.1 cents ($0.141) per kilometre. Required: 1. Using the high-low method, estimate the variable and fixed cost elements of the annual cost of truck operation. (Do not round your intermediate calculations. Round the "Varlable cost per kilometer" to 3 decimal places.) 2. Express the varlable and fixed costs in the form Y=a+bX. (Do not round your Intermediate calculations. Round the "Varlable cost per kllometer"' to 3 decimal places.) 2. Express the variable and fixed costs in the form Y=a+bX. (Do not round your intermediate calculations. Round the "Variable cost per kllometer" to 3 decimal places.) 3. If a truck were driven 148,700 kilometres during a year, what total cost would you expect to be incurred? (Do not round intermediate calculations. Round the "Variable cost per kilometer" to 3 decimal places.)
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