1. Required
2. Use the scatter graph method to estimate total fixed costs per year and the variable cost per mile. State your results in the cost equation form Y = f + v X by filling in the dollar amounts for f and v.
3. 
   
4.  What would the estimated costs be if the trucks drove 500,000 miles in year 7?
5. 
    Use the regression output to develop the cost equation Y = f + v X by filling in the dollar amounts for f and v.
6. 
   
7.  What would the city of Rockville’s estimated costs be if its trucks drove 500,000 miles in year 7?

1. Reporting Period (Year)
2. 
   
3.                     Total Costs     Level of Activity (Miles Driven)  
4. 
   
5. Year 1            $ 750,000          225,000
6. 
   
7. Year 2             850,000          240,000
8. 
   
9. Year 3          1,100,000            430,000
10. 
    
11. Year 4           1,150,000           454,000
12. 
    
13. Year 5          1,250,000           560,000
14. 
    
15. Year 6           1,550,000        710,000
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