Pendelton Cabs, Inc. has incurred the following maintenance costs on its fleet of taxicabs during the past six months.
Month Miles Logged Maintenance Costs
1 12,700 $13,000
2 8,300 8,500
3 10,500 10,700
4 15,600 15,800
5 9,200 9,700
6 11,700 12,000
First requirement: Use the High-Low cost estimation method to determine the expected cost if 12,000 miles are logged in one month
Second requirement: Refer to the data above for Pendelton Cabs, Inc. The data was entered into a regression program, resulting in the following output. Use this output to determine the expected cost if 12,000 miles are logged in one month.
Intercept 435.9561
X Coeffecient 0.9865
R Square 0.9982
Standard Error 0.0212