A transport company is studying the total cost of operations. It is assumed that the costs are dr...
A transport company is studying the total cost of operations. It is assumed that the costs are driven mainly by the kilometres covered. Data for the past four months is shown here:
| Month | Kilometres | Total Cost ($) |
| January | 8,000 | 144,000 |
| February | 5,000 | 120,000 |
| March | 7,000 | 141,000 |
| April | 9,000 | 195,000 |
a) What is the relevant range for the company operations?
b) Using the high-low method, estimate the company's variable cost per kilometre (2 marks)
Homework Answers
Ans a) The relevant range is $120000 to 195000
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A transport company is studying the total cost of operations. It is assumed that the costs are dr...
Question 4 In applying the high-low method, what is the fixed cost? Month Miles 80,000 January...
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