A company sells two models of a product—basic and premium. The basic model has a variable cost of $75 and sells for $100. The premium model has a variable cost of $100 and sells for $150. If the company usually sells 5,000 basic models and 2,500 premium models, then the contribution margin per composite unit is $.

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.)