If a truck is driven 147,000 miles during a year, the average operating cost is 8.7 cents per mile. If a truck is driven only 98,000 miles during a year, the average operating cost increases to 9.6 cents per mile.
a. Using high/low method, estimate the variable (3 decimal places) and fixed cost (nearest dollar amount) elements of the annual cost of truck operation.
b. Express the variable and fixed costs in the form Y= a+bX
c. If a truck driven 122,000 miles during a year, what total cost would you expect to be incurred?
Click here for the solution: If a truck is driven 147,000 miles during a year, the average operating cost is 8.7 cents per mile
