financeSpeedy Pete's is a small start-up company that delivers high-end coffee drinks to large metropolitan office buildings via a cutting-edge motorized coffee cart to compete with other premium coffee shops. Data for the past $8$ months were collected as follows:
$$
\begin{array}{lcc}
\text{ Month } & \text{ Delivery Cost } & \text{ Number of Deliveries } \\
\hline \text{ May } & \$ 63,450 & 1,800 \\
\text{ June } & 67,120 & 2,010 \\
\text{ July } & 66,990 & 2,175 \\
\text{ August } & 68,020 & 2,200 \\
\text{ September } & 73,400 & 2,550 \\
\text{ October } & 72,850 & 2,630 \\
\text{ November } & 75,450 & 2,800 \\
\text{ December } & 73,300 & 2,725
\end{array}
$$
Speedy Pete's controller wants to calculate the fixed and variable costs associated with its cutting-edge delivery service.
Required:
Using the high-low method, calculate the fixed cost of deliveries, calculate the variable rate per delivery, and construct the cost formula for total delivery cost. 6th Edition•ISBN: 9780078692512McGraw-Hill Education3,894 solutions
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