Hoi Chong Transport, Ltd. operates a fleet of delivery trucks in Singapore. The company has determined that
Question:
Hoi Chong Transport, Ltd. operates a fleet of delivery trucks in Singapore. The company has determined that if a truck travels 118,000 kilometers in a year, the average operating cost is 12.513 cents per kilometer. If a truck travels only 53,000 miles in a year, the average operating cost rises to 15.8 cents per mile. (The Singapore dollar is the currency used in Singapore.)
Required:
1. Using the high-low method, estimate the variable and fixed cost elements of the annual cost of operating the truck. (Round "Variable Cost" to 5 decimal places. Round "Fixed Cost" to 2 decimal places.)
2. Express the fixed and variable costs in the form Y = a + bX . ( Round "Variable Cost" to 5 decimal places. Round "Fixed Cost" to 2 decimal places. )
3. If a truck traveled 93,000 kilometers in a year, what total cost would you expect to incur? ( Do not round intermediate calculations. Round "Total Annual Cost" to 2 decimal places.
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer