Hoi Chong Transport, Limited, operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driver 93,000 kilometers during a year, the average operating cost is 9.2 cents per kilometer. If a truck is driven only 62,000 kilometers during a year, the average operating cost increases to 9.9 cents per kilometer. Required: 1. Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated wit the fleet of trucks. 2. Express the variable and fixed costs in the form Y = a + bX. 3. If a truck were driven 77,500 kilometers during a year, what total operating cost would you expect to be incurred?
Hoi Chong Transport, Limited, operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driver 93,000 kilometers during a year, the average operating cost is 9.2 cents per kilometer. If a truck is driven only 62,000 kilometers during a year, the average operating cost increases to 9.9 cents per kilometer. Required: 1. Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated wit the fleet of trucks. 2. Express the variable and fixed costs in the form Y = a + bX. 3. If a truck were driven 77,500 kilometers during a year, what total operating cost would you expect to be incurred?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Hoi Chong Transport, Limited, operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven
93,000 kilometers during a year, the average operating cost is 9.2 cents per kilometer. If a truck is driven only 62,000 kilometers
during a year, the average operating cost increases to 9.9 cents per kilometer.
Required:
1. Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated with
the fleet of trucks.
2. Express the variable and fixed costs in the form Y = a + bx.
3. If a truck were driven 77,500 kilometers during a year, what total operating cost would you expect to be incurred?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F621663c7-0fe0-4c1b-bfdb-6a6ea60efc81%2F6f182eae-b996-4b5c-9535-3fd27b296e51%2Feqzb9xp_processed.png&w=3840&q=75)
Transcribed Image Text:Hoi Chong Transport, Limited, operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven
93,000 kilometers during a year, the average operating cost is 9.2 cents per kilometer. If a truck is driven only 62,000 kilometers
during a year, the average operating cost increases to 9.9 cents per kilometer.
Required:
1. Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated with
the fleet of trucks.
2. Express the variable and fixed costs in the form Y = a + bx.
3. If a truck were driven 77,500 kilometers during a year, what total operating cost would you expect to be incurred?
![Required 1
Required 2 Required 3
Express the variable and fixed costs in the form Y= a + bX. (Do not round your intermediate calculations. Round the Variable
cost per kilometer to 3 decimal places.)
Y =
X](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F621663c7-0fe0-4c1b-bfdb-6a6ea60efc81%2F6f182eae-b996-4b5c-9535-3fd27b296e51%2Fsqrrp0v_processed.png&w=3840&q=75)
Transcribed Image Text:Required 1
Required 2 Required 3
Express the variable and fixed costs in the form Y= a + bX. (Do not round your intermediate calculations. Round the Variable
cost per kilometer to 3 decimal places.)
Y =
X
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