high low method

BBaton · #1 Oct 30, 2007, 06:18 PM

Estimate the variable and fixed cost elements of annual cost of truck operation?

A truck delivery is driven 120000 during a year costing 11.6 but if a truck is driven only 80,000 kilometers at 13.6 increase in a year?

BBaton · Oct 30, 2007, 06:22 PM

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A truck delivery is driven 120,000 during a year costing 11.6 yearly but if a truck is driven only 80,000 kilometers at 13.6 increases in a year? what would the variable and fixed cost would be ?

[/quote]

abdulwahab · Sep 4, 2008, 08:18 AM

units cost
highest 120000 11.6
lowest 80000 13.6
- -
40000 2

variable cost/unit =2/40000= 0.00005/unit
fixed cost =11.6 - (120000*0.00005)
=11.6 - 6
=5.6 fixed cost

chief77 · Sep 10, 2008, 08:23 AM

If the truck above covers 100km what would you expect to incur?



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