Exercise 2-12 Cost Behavior; High-Low Method [LO2-3, LO2-4) 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 120,000 miles during a year, the average operating cost is 11.6 cents per mile. If a truck is driven only 80,000 miles during a year, the average operating cost increases to 13.6 cents per mile. Required: 1.& 2. 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.) Answer is complete but not entirely correct. Miles Driven 120,000 Total Annual Cost $ 1,392,000 High level of activity & Answer is complete but not entirely correct. Miles Total Annual Cost $ 1,392,000 1,088,000 $ 304,000 Driven 120,000 80,000 40,000 High level of activity Low level of activity Change $ 7.600 per unit Variable cost per mile Fixed cost per year $ 480,000 3. If a truck were driven 100,000 miles during a year, what total cost would you expect to be incurred? Anewer is complete but not entirely correct. Change 40,000 $ 304,000 $ 7.600 per unit Variable cost per mile Fixed cost per year $ 480,000 $ 3. If a truck were driven 100,000 miles during a year, what total cost would you expect to be incurred? Answer is complete but not entirely correct. Total annual cost $ 1,240,000