Reference no: EM132054684

Question - 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 171,000 miles during a year, the average operating cost is 13.5 cents per mile. If a truck is driven only 114,000 miles during a year, the average operating cost increases to 17.2 cents per mile

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

2. If a truck were driven 142,000 miles during a year, what total cost would you expect to be incurred?