urrentS signin hm.tpx Options v value 200 points Hoi Chong Transport, Ltd, opera

Question

urrentS signin hm.tpx Options v value 200 points Hoi Chong Transport, Ltd, operates a fleet of delivery trucks in Singapore The company has determined that if a truck is driven 110,000 kilometers during a year, the average operating cost is 1120 cents per kilometer. If a truck is driven only 63,000 kikometers during a year, the average operating cost increasos to 1400 cents per kilometer The Singapore dollarthe currency used in Singapore. Requirement 1 Using the high-low method, estimate the variable and fxed cost elements of the annual cost of the truck operation (Round the variable cost per kilometer to 3 decimal places and the fixed cost to the nearest dollar amount. Omit the "$" sign in your response.) truck

Explanation / Answer

b is considered to be a Variable Cost = Y2-Y1/ X2- X1

highest cost -lowerst cost / highest km - lowest km

=$12,320 - $8820/ 110,000 -63,000

=$3500 / 47000 km

b=$0.074468085

Total fixed cost isconsidered to be

a = Y2 - bx2 = Y1 -Bx1

=$12,320 - 8191. 48935(110,000*$0.074468085) = 8820 - 4691.489355 (63,000 * $0.074468085)

a=$4128.51065=4128.51065

Explanation: =

=11.20 * 110,000 - 14 *63000

=1,232,000 cents /100=$12,320

Note 100 cents =1 dollars

14 *63000=882,000/100=$8820

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2)y=$4128.51065+$0.074468085x

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3) 92,000 * 14 cents

=1,288,000 /100

=$12880

Annual cost =$12880

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