Brazilia Bus Tours has incurred the following bus maintenance costs during the recent tourist season. (The real is Brazil's national monetary unit. On the day this exercise was written, the real was equivalent in value to .5092 U.S. dollar.)
Required:
Use the high-low method to estimate the variable cost per tour mile traveled and the fixed cost per month. (Round "Variable cost per tour mile" to 3 decimal places.)
Predict the level of maintenance cost that would be incurred during a month when 34,000 tour miles are driven.
Develop a formula to express the cost behavior exhibited by the company's maintenance cost. (Round "Variable cost per tour mile" to 3 decimal places.
Month Miles Traveled
by Tour Buses Maintenance
Cost
November 12,750 17,100 real
December 15,900 17,400
January 19,050 17,550
February 22,500 18,000
March 30,000 18,750
April 12,000 16,500