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We Dellver operates a fleet of delivery trucks in Hailfax. Analysis shows that if a truck is driven 121,000 kliometres duting a year, the average
We Dellver operates a fleet of delivery trucks in Hailfax. Analysis shows that if a truck is driven 121,000 kliometres duting a year, the average operatting cost is 117 cents (\$0.117) per kilometre. If a truck is driven only 90,000 kllometres during a year, the average operating cost increases to 13.7 cents (\$0.137) per ktlometre. Required: 1. Using the high-low method, estimate the vartable and fixed cost elements of the annual cost of truck operation. (Do not round your Intermediate calculotlons. Round the "Vorlable 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 kilometer" to 3 decimal places.)
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