Hello can anyone help me with Mangerial accounting !
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Speedy Parcel Service operates a fleet of delivery trucks in a large metropolitan area. A careful study by the company’s cost analyst has determined that if a truck is driven 132,000 miles during a year, the average operating cost is 14.2 cents per mile. If a truck is driven only 88,000 miles during a year, the average operating cost increases to 17.6 cents per mile. |
| Required: | |
| 1. |
Using the high low method, estimate the variable and fixed cost elements of the annual cost of truck operation. (Round the “Variable cost per mile” to 3 decimal places and the “Fixed cost” to the nearest dollar amount.) |
| Variable cost | $ | per mile |
| Fixed cost | $ | per year |
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| 2. |
Express the variable and fixed costs in the form Y = a + bX. (Round the “Variable cost per mile” to 3 decimal places and the “Fixed cost” to the nearest dollar amount.) |
| Y = | $ | + | $ | X |
| 3. |
If a truck were driven 110,000 miles during a year, what total cost would you expect to be incurred?(Round the “Variable cost per mile” to 3 decimal places. Round your intermediate and final answers to the nearest dollar amount.) |
| Total annual cost | $ |