Question

Hoi Chong Transport, Ltd, operates a fleet of delivery trucks in Singapore. The company 138,000 kilometers during a year, the average operating cost is 148 cents per k has determined that if a truck is driven If a truck is driven only 92,000 k rating cost increases to 18.6 cents per kilometer cost a the fleet of trucks. 2. Express the variable and fixed costs in the form Y-a +bx

Answer 1

			No. of kilometers	Total cost
		High	138000	2042400
		Low	92000	1711200
			46000	331200
1	Variable cost	$7.20	Per kilometer	(331200/46000)
	Fixed cost	1048800	per year	1711200-(92000*7.2)
2	Expression in form y = a + bx
		Y = 1048800 + 7.2X
3	Total operating cost	1876800	1048800 + (7.2*115000)