Question

Karen Battle​, owner of Flower Hour​, operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a flat delivery​ fee, Battle wants to set the delivery fee based on the distance driven to deliver the flowers. Battle wants to separate the fixed and variable portions of her van operating costs so that she has a better idea how delivery distance affects these costs. She has the following data from the past seven​ months:

Data Set:

Month	Miles Driven	Van Operating Cost
Janu	15800	5460
Feb	17300	5680
Mar	14600	4940
Apr	16000	5310
May	17100	5830
Jun	15400	5420
Jul	14100	4880

1. Use the​ high-low method to determine Flower Hour​'s operating cost equation.

2. Use the operating cost equation you determined above to predict van operating costs at a volume of

14,500 miles.​

Show Calculations.

Answer 1

1) Operating Cost Equation => Y = $1,335 + $0.25×.

2)

If you have any doubts please comment on the answer.