Bosco Bonnet, a local trucker, owns and operates his own delivery service. He has 1990 1-ton truck. Bosco’s biggest expense lately has been maintenance on the truck. He is interested in budgeting his costs for the months ahead. The following shows the mileage and maintenance costs for the 1st eight months of 2002.
January
February
March
April
May
June
July
August
Mileage
8,950
9,800
9,300
10,000
9,750
7,200
7,500
7,350
Maintenance Cost
$9,200
9,120
10,200
8,900
9,400
9,096
9,000
9,200
REQUIRED
Using the high-low method, express Bosco’s truck maintenance costs in a cost formula (Y=a + bx)
A. What would the expected maintenance cost be if he drove 9,000 miles?
B. What would the expected maintenance cost be if he drove 7,000 miles?