1. Using the High-Low Method
Hector's Delivery Service uses four small vans and six pickup trucks to deliver small packages in the Char- lotte, North Carolina, metropolitan area. Hector spends a considerable amount of money on the gas, oil, and regular maintenance of his vehicles, which is done at a variety of service stations and repair shops. To budget his vehicle expenses for the coming year, he gathers data on his expenses and number of deliveries for each month of the current year.
|
Total VehicleExpenses
|
TotalDeliveries
|
|
January
|
$145,329
|
5,882
|
|
February
|
133,245
|
5,567
|
|
March
|
123,245
|
5,166
|
|
April
|
164,295
|
6,621
|
|
May
|
163,937
|
6,433
|
|
June
|
176,229
|
6,681
|
|
July
|
180,553
|
7,182
|
|
August
|
177,293
|
6,577
|
|
September
|
155,389
|
5,942
|
|
October
|
150,832
|
5,622
|
|
November
|
152,993
|
5,599
|
|
December
|
201,783
|
7,433
|
Required Use the high-low estimation method to determine the relationship between the number of deliv- eries and the cost of maintaining the vehicles.