Question

Brian Snow is a river guide on the Columbia River. Typically brian takes tourists around 30 to 80 miles upriver. Round trip takes anywhere from 2 to 8 hours before returning to dock. Brian has noted that overall fuel costs vary based on "miles upriver" and he is considering changing his guide fee to separately charge customers for estimated fuel costs. Below Brian's log for 15 typical days showing “miles upriver" and "total fuel cosť. Miles Upriver Fuel Cost Day $129 55 61 139 33 109 120 42 148 73 6. 37 111 127 49 55 130 139 9. 66 10 36 115 11 43 120 12 67 144 124 13 52 130 14 54 46 120 15 $ 769 $1,905 Total

Answer 1

a]		Miles Run	Cost
	High	73	$                148
	Low	33	$                109
	Variable fuel cost = (148-109)/(73-33) =		$            0.975	per mile
	Fixed cost = 148-73*0.975 =		$            76.83	per day
b]	The $2.50 per mile will not be a fair formula, as there is a fixed portion
	in the total cost.
	The formula should be:
	$76.83+$0.975*x, where x = the number of miles.