,operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a flat delivery fee,attached in ss Kelly Battle, owner of Flower Paradise, operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a flat delivery fee, Battle wants to setthe delivery fee based on the distance driven to deliver the flowers. Battle wants to separate the fixed and variable portions of her van operating costs so that she has a betteridea how delivery distance affects these costs. She has the following data from the past seven months:(Click the icon to view the data.)Use the high-low method to determine Flower Paradise's cost equation for van operating costs. Use your results to predict van operating costs at a volume of 15,000 miles.CLet's begin by determining the formula that is used to calculate the variable cost (slope).Variable cost (slope)=Data tableMonthJanuaryFebruaryMarchAprilMayJuneJuly .........Miles Driven15,70016,50014,50016,00016,30015,10014,000Van Operating Costs$5,350$5,160$4,960$5,320$5,500$5,050$4,560

High-low method is one of the techniques that is used to separate fixed and variable components from…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Use the high-low method to determine Flower Paradise's cost equation for van operating costs. Use your results to predict van operating costs at a volume of 15,000 mil Let's begin by determining the formula that is used to calculate the variable cost (slope). Variable cost (slope) Data table