Tarrant Corporation was organized this year to operate a financial consulting business. The charter authorized the following stock: common stock, $17 par value, 11,800 shares authorized. During the year, the following selected transactions were completed: a. Sold 6,600 shares of common stock for cash at $34 per share. b. Sold 2,300 shares of common stock for cash at $39 per share. c. At year-end, the accounts reflected income of $7,100. No dividends were declared.

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.)