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View Full Version : Estimating a cost function, high-low method?


evanss1976
May 10, 2008, 12:29 PM
Reisen Travel offers helicopter service from suburban towns to john F. Kennedy Airport. Each of it's 10 helicopters makes between 1,000 and 2,000 round trips per year. The records indicate that a helicopter that has made 1,000 round trips has an average operating cost of $300, and one that has made 2,000 round trips has an average operating cost of $250.
1. Estimate the linear relationship y = a+bx, where y is the total annual operating cost of the helicopter and x is the number of round trips.
2. give examples of costs that would be included in a and b
3. if Reisen Travel expects each helicopter to make an aver 1,200 round trips in the coming year, what should its operating budget for the helicopter fleet be?

morgaine300
May 10, 2008, 01:02 PM
Please see our homework guidelines in red at the top of the page:

https://www.askmehelpdesk.com/finance-accounting/announcement-font-color-ff0000-u-b-read-first-expectations-homework-help-board-b-u-font.html