Estimate the variable and fixed cost elements

Reference no: EM13257293

If a truck is driven 131,000 miles during a year, the averageoperating cost is 11.9 cents per mile. If a truck is drivenonly 84,000 miles during a year, the average operating costincreases to 13.3 cents per mile.

1. Using the high-low method, estimate the variable and fixed cost elements of the annual cost of truck operation.

Variable cost per mile-Fixed cost per year-

2. Express the variable and fixed costs in the formY=a+bX
Y= $_________ + $____________X

3. Based on the formula computed #2, what wiould you expectthe total cost to be at 100,000 miles?

Reference no: EM13257293

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