Problem:
Rio Bus Tours has incurred the following bus maintenance costs during the recenttourist season.
(The real is Brazil's national monetary unit. On the day this exercise was written, the real was equivalent in .4378 US dollar.)
Month Miles traveled by the us Cost
Nov 8,500 11,400 real
Dec 10,600 11,600
Jan 12,700 11,700
Feb 15,000 12,000
Mar 20,000 12,500
Apr 8,000 11,000
1. Use the high-low method to estimate the variable cost er tour miles traveled and fixed cost per month.
2. Develop a formula to express the cost behavior exhibited by the compny's maintenance cost.
3. Predict the level of maintenance cost that woud be ncurred during a month when 22,000 tour miles are driven (real numbers)
4. Construct a Excel spreadsheet to solve all the preceding requirements. Show how the solution will change if the following information changes: in Marh there were 21,000 miles traveled and the cost was 12,430 real.