On january 1, 2019, quenneville corporation sold equipment to wirtz, inc., for $500,000. the equipment had cost $300,000 to manufacture. the contract with wirtz requires quenneville to provide complete maintenance and repair services on the equipment for 5 years. quenneville's cost to provide the services are $10,000 per year.

Exercise 2-12 cost behavior; high-low method [lo2-3, lo2-4] speedy parcel service operates a fleet of delivery trucks in a large metropolitan area. a careful study by the company’s cost analyst has determined that if a truck is driven 120,000 miles during a year, the average operating cost is 11.6 cents per mile. if a truck is driven only 80,000 miles during a year, the average operating cost increases to 13.6 cents per mile. required: 1.& 2. using the high-low method, estimate the variable and fixed cost elements of the annual cost of truck operation. (round the "variable cost per mile" to 3 decimal places.)