Hoi Chong Transport, Limited, operates a fleet of delivery trucks in Singapore. The company has determined that if a tru
Posted: Wed May 04, 2022 6:44 am
Hoi Chong Transport, Limited, operates a fleet of delivery
trucks in Singapore. The company has determined that if a truck is
driven 96,000 kilometers during a year, the average operating cost
is 10.3 cents per kilometer. If a truck is driven only 64,000
kilometers during a year, the average operating cost increases to
11.5 cents per kilometer.
Required:
1. Using the high-low method, estimate the variable operating
cost per kilometer and the annual fixed operating cost associated
with the fleet of trucks.
2. Express the variable and fixed costs in the form Y = a +
bX.
3. If a truck were driven 80,000 kilometers during a year, what
total operating cost would you expect to be incurred?
trucks in Singapore. The company has determined that if a truck is
driven 96,000 kilometers during a year, the average operating cost
is 10.3 cents per kilometer. If a truck is driven only 64,000
kilometers during a year, the average operating cost increases to
11.5 cents per kilometer.
Required:
1. Using the high-low method, estimate the variable operating
cost per kilometer and the annual fixed operating cost associated
with the fleet of trucks.
2. Express the variable and fixed costs in the form Y = a +
bX.
3. If a truck were driven 80,000 kilometers during a year, what
total operating cost would you expect to be incurred?