Delivery service uses four small vans and six pickup trucks

Assignment Help Accounting Basics

Reference no: EM131086535

1. Using the High-Low Method

Hector's Delivery Service uses four small vans and six pickup trucks to deliver small packages in the Char- lotte, North Carolina, metropolitan area. Hector spends a considerable amount of money on the gas, oil, and regular maintenance of his vehicles, which is done at a variety of service stations and repair shops. To budget his vehicle expenses for the coming year, he gathers data on his expenses and number of deliveries for each month of the current year.

	Total VehicleExpenses	TotalDeliveries
January	$145,329	5,882
February	133,245	5,567
March	123,245	5,166
April	164,295	6,621
May	163,937	6,433
June	176,229	6,681
July	180,553	7,182
August	177,293	6,577
September	155,389	5,942
October	150,832	5,622
November	152,993	5,599
December	201,783	7,433

Required Use the high-low estimation method to determine the relationship between the number of deliv- eries and the cost of maintaining the vehicles.

Reference no: EM131086535

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