Really fast delivery services has the collected the following information about operating expenditures for its delivery truck fleet for the past five years: year miles operating costs
year miles operating costs
2013 55000 195000
2014 7 21
2015 5 18
2016 65000 205000
2017 85000 225150
what is the best estimate of total operating expenses for 2018 using the high-low method based on total expected miles of 60,000?

a. $192,900
b. $195,000
c. $196,000
d. $201,000

Estimated OC  for Really Fast Delivery Services is $192,900

Variable cost as per miles = (High OC - Low OC) / (High miles - Low miles)

Variable cost as per miles = [225,150 - 180,000] / [85,000 -  50,000]

Variable cost as per miles = 45,150 / 35,000  

Variable cost as per miles = $1.29 per miles

Fixed cost  = High OC - (High miles × VC per miles)

Fixed cost = $225,150 - (85,000 × $1.29)

Fixed cost = $115,500      

Estimated OC  = Fixed cost + [Expected miles × VC per miles]

Estimated OC  = $115,500 + [60,000 × 1.29]

Estimated OC = $115,500 + $77,400

Estimated OC  = $192,900

So, Option "A" is the correct answer to the following question.

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A. $192,900

Explanation:

In order to compute the total operating expenses for 2018, first, we have to calculate the variable cost per miles and the fixed cost which is shown below:

Variable cost per miles = (High Operating cost - low operating cost) ÷ (High miles - low miles)

= ($225,150 - $180,000) ÷ (85,000 miles -  50,000 miles)

= $45,150 ÷ 35,000 miles

= $1.29 per miles

Now the fixed cost equal to

= High operating cost - (High miles × Variable cost per miles)

= $225,150 - (85,000 miles × $1.29)

= $225,150 - $109,650

= $115,500      

Now the estimated operating expenses would be

= Fixed cost + expected miles × variable cost per miles

= $115,500 + 60,000 × 1.29

= $115,500 + $77,400

= $192,900

answer; the cpi;

answer(b); ; ; the quantitative or qualitative variable for which the experimenter wishes to determine how its value is affected by the explanatory variable;