Hoi Chong Transport, Limited, operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 114.000 kilometers during a year, the average operating cost is 12.7 cents per kilometer. If a truck is driven only 76,000 kilometers during a year, the average operating cost increases to 14.8 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 95,000 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 driven 114.000 kilometers during a year, the average operating cost is 12.7 cents per kilometer. If a truck is driven only 76,000 kilometers during a year, the average operating cost increases to 14.8 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 95,000 kilometers during a year, what total operating cost would you expect to be incurred?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![Exercise 6A-3 (Algo) Cost Behavior; High-Low Method [LO6-10]
Hoi Chong Transport, Limited, operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven
114.000 kilometers during a year, the average operating cost is 12.7 cents per kilometer. If a truck is driven only 76,000 kilometers
during a year, the average operating cost increases to 14.8 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 95,000 kilometers during a year, what total operating cost would you expect to be incurred?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated
with the fleet of trucks. (Do not round your intermediate calculations. Round the Variable cost per kilometer to 3 decimal
places.)
Variable cost
Fixed cost
per kilometer
per year
< Required 1
Required 2 >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F58f64e99-b3fb-491d-a9f5-7a66a1bd819c%2Fe31b9094-9da7-4f95-9b7b-d795c048ad78%2Fa30ig4_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 6A-3 (Algo) Cost Behavior; High-Low Method [LO6-10]
Hoi Chong Transport, Limited, operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven
114.000 kilometers during a year, the average operating cost is 12.7 cents per kilometer. If a truck is driven only 76,000 kilometers
during a year, the average operating cost increases to 14.8 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 95,000 kilometers during a year, what total operating cost would you expect to be incurred?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated
with the fleet of trucks. (Do not round your intermediate calculations. Round the Variable cost per kilometer to 3 decimal
places.)
Variable cost
Fixed cost
per kilometer
per year
< Required 1
Required 2 >
![Exercise 6A-3 (Algo) Cost Behavior; High-Low Method [LO6-10]
Hol Chong Transport, Limited, operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven
114,000 kilometers during a year, the average operating cost is 12.7 cents per kilometer. If a truck is driven only 76,000 kilometers
during a year, the average operating cost increases to 14.8 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 95,000 kilometers during a year, what total operating cost would you expect to be incurred?
Complete this question by entering your answers in the tabs below.
Required 11
Required 2 Required 3
Express the variable and fixed costs in the form Ya+bX. (Do not round your intermediate calculations. Round the Variable
cost per kilometer to 3 decimal places.)
Show Transcribed Text
< Required 1
3
Exercise 6A-3 (Algo) Cost Behavior; High-Low Method [LO6-10]
Hot Chong Transport, Limited, operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven
114,000 kilometers during a year, the average operating cost is 12.7 cents per kilometer. If a truck is driven only 76,000 kilometers
during a year, the average operating cost increases to 14.8 cents per kilometer.
Required 3 >
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 95,000 kilometers during a year, what total operating cost would you expect to be incurred?
Required 1 Required 2
Complete this question by entering your answers in the tabs below.
Required 3
A
If a truck were driven 95,000 kilometers during a year, what total operating cost would you expect to be incurred? (Do not
round intermediate calculations.)
Total annual cost
< Required 2
Required 3](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F58f64e99-b3fb-491d-a9f5-7a66a1bd819c%2Fe31b9094-9da7-4f95-9b7b-d795c048ad78%2F6dcaatp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 6A-3 (Algo) Cost Behavior; High-Low Method [LO6-10]
Hol Chong Transport, Limited, operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven
114,000 kilometers during a year, the average operating cost is 12.7 cents per kilometer. If a truck is driven only 76,000 kilometers
during a year, the average operating cost increases to 14.8 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 95,000 kilometers during a year, what total operating cost would you expect to be incurred?
Complete this question by entering your answers in the tabs below.
Required 11
Required 2 Required 3
Express the variable and fixed costs in the form Ya+bX. (Do not round your intermediate calculations. Round the Variable
cost per kilometer to 3 decimal places.)
Show Transcribed Text
< Required 1
3
Exercise 6A-3 (Algo) Cost Behavior; High-Low Method [LO6-10]
Hot Chong Transport, Limited, operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven
114,000 kilometers during a year, the average operating cost is 12.7 cents per kilometer. If a truck is driven only 76,000 kilometers
during a year, the average operating cost increases to 14.8 cents per kilometer.
Required 3 >
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 95,000 kilometers during a year, what total operating cost would you expect to be incurred?
Required 1 Required 2
Complete this question by entering your answers in the tabs below.
Required 3
A
If a truck were driven 95,000 kilometers during a year, what total operating cost would you expect to be incurred? (Do not
round intermediate calculations.)
Total annual cost
< Required 2
Required 3
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