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Question - High Low and Regression
Pendelton Cabs, Inc. has incurred the following maintenance costs on its fleet of taxicabs during the past six months.
Month Miles Logged Maintenance Costs
1 12,700 $13,000
2 8,300 8,500
3 10,500 10,700
4 15,600 15,800
5 9,200 9,700
6 11,700 12,000
Use the High-Low cost estimation method to determine the expected cost if 12,000 miles are logged in one month.
Refer to the data above for Pendelton Cabs, Inc. The data was entered into a regression program, resulting in the following output. Use this output to determine the expected cost if 12,000 miles are logged in one month.
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