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Hoi Chong Transport, Ltd. Operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 125,000 kilometres during a year, the average operating cost is 12.520 cents per kilometre. If a truck is driven only 90,000 kilometres during a year, the average operating cost increases to 16.5 cents per kilometre. (The Singapore dollar is the currency used in Singapore.)

Respuesta :

Answer:

The total cost will be "$1,279,286.25".

Explanation:

The total cost at 125000 Km will be:

[tex]=125000\times 12.520[/tex]

[tex]=1,565,000[/tex] ($)

The total cost at 90000 Km will be:

[tex]=90000\times 16.5[/tex]

[tex]=1,485,000[/tex] ($)

The variable cost will be:

[tex]=\frac{(1,565,000 - 1,485,000)}{(125000 -90000) }[/tex]

[tex]=2.28571[/tex] ($)

Now,

Fixed cost = [tex]Total \ cost -variable \ c ost[/tex]

                  = [tex]1,565,000 - 125000\times 2.28571[/tex]

                  = [tex]1,279,286.25[/tex] ($)

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