Packpride Movers Inc. documented the miles driven and total moving van costs for the past five months as follows:
Number of Miles Total Vehicle Costs
January 4,800 $ 5,800
February 3,000 5,400
March 5,300 6,100
April 6,000 6,000
May 3,500 4,800
A. Which two months exhibit the high and low activity levels?
B. Using the high/low method, what is the variable cost per mile?
Answer: $______ per mile
C. Using the high/low method, what are total fixed costs?
D. Using your answers to “B” and “C”, write the equation to predict moving van costs:
E. If the company expects to drive 7,000 miles in June, what will be the estimated total vehicle costs?