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We Deliver operates a fleet of delivery trucks in Halifax. Analysis shows that if a truck is driven 121,000 kilometres during a year, the average
We Deliver operates a fleet of delivery trucks in Halifax. Analysis shows that if a truck is driven 121,000 kilometres during a year, the average operating cost is 11.7 cents ($0.117) per kilometre. If a truck is driven only 90,000 kilometres during a year, the average operating cost increases to 13.7 cents ($0.137) 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 01:17:43 intermediate calculations. Round the "Variable cost per kilometer" to 3 decimal places.) pped Kilometers Total Annual Driven Cost High level of activity 1,590 Book Low level of activity Print Change 1,590 $ 0 rences Variable cost per kilometer Fixed cost per year 2. Express the variable and fixed costs in the form Y = a + bX. (Do not round your intermediate calculations. Round the "Variable cost per kilometer" to 3 decimal places.) Y = X3. If a truck were driven 105.800 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.) :l n
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