Business, 20.02.2020 01:56 MoneyMike42

Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 177,000 kilometers during a year, the average operating cost is 12.3 cents per kilometer. If a truck is driven only 118,000 kilometers during a year, the average operating cost increases to 15.5 cents per kilometer.

Required:
1.
Using the high-low method, estimate the variable and fixed cost elements of the annual cost of the truck operation. (Do not round your intermediate calculations. Round the Variable cost per kilometer to 3 decimal places and Fixed cost answer to nearest whole dollar amount.)

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.

3.
If a truck were driven 147,000 kilometers during a year, what total cost would you expect to be incurred? (Do not round intermediate calculations.)

Answers: 1

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Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has determi...

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