Habib transport company Itd, operates a fleet of delivery trucks in Singapore. The Company has determined that if a truck is driven 135,000 kilometers during a year, The average operating cost is 11.8 cent per kilometers. If a truck driven 95,000 kilometers during a year, the average operating cost increases to 13.6 cents per kilometers. Requirement a) Using high-low method estimate the variable and fixed costs elements of the annual cost of truck operators. b) Express the variable and fixed costs in the form y= a +bx e) if a truck were driven to 100,000 kilometers during a year, what total cost would you expect to be incurred?
Habib transport company Itd, operates a fleet of delivery trucks in Singapore. The Company has determined that if a truck is driven 135,000 kilometers during a year, The average operating cost is 11.8 cent per kilometers. If a truck driven 95,000 kilometers during a year, the average operating cost increases to 13.6 cents per kilometers. Requirement a) Using high-low method estimate the variable and fixed costs elements of the annual cost of truck operators. b) Express the variable and fixed costs in the form y= a +bx e) if a truck were driven to 100,000 kilometers during a year, what total cost would you expect to be incurred?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Habib transport company Itd, operates a fleet of delivery trucks in Singapore. The Company has determined that if a truck is driven 135,000 kilometers during a year, The average operating cost is 11.8 cent per kilometers. If a truck driven 95,000 kilometers during a year, the average operating cost increases to 13.6 cents per kilometers.
Requirement
- a) Using high-low method estimate the variable and fixed costs elements of the annual cost of truck operators.
- b) Express the variable and fixed costs in the form y= a +bx
- e) if a truck were driven to 100,000 kilometers during a year, what total cost would you expect to be incurred?
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