Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

We Deliver operates a fleet of delivery trucks in Halifax. Analysis shows that if a truck is driven 96,000 kilometres during a year, the average

image text in transcribed

We Deliver operates a fleet of delivery trucks in Halifax. Analysis shows that if a truck is driven 96,000 kilometres during a year, the average operating cost is 10.3 cents ($0.103) per kilometre. If a truck is driven only 64,000 kilometres during a year, the average operating cost increases to 11.5 cents ($0.115) 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 Variable cost per kilometre to 3 decimal places and Fixed cost answer to nearest whole dollar amount.) Kilometers Driven 96,000 Total Annual Cost High level of activity Low level of activity Change 96,000 per kilometer 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 kilometre to 3 decimal places.) Y = 3. If a truck was driven 80,000 kilometres during a year, what total cost would you expect to be incurred? (Do not round intermediate calculations.) Total annual cost

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions

Question

How forthcoming is the company with information? P-6523

Answered: 1 week ago