Joyce Murphy runs a courier service in downtown Seattle. She charges clients $0.52 per mile driven. Joyce has determined that if she drives 2,050 miles in a month, her total operating cost is $525. If she drives 3,150 miles in a mornth, her total operating cost is $657 Required: 1. Using the high-low method, determine Joyce's variable and fixed operating cost components. (Round your cost per unlt answer to 2 declmal places.

Fixed expense = $279

Variable expense = $0.12 per unit

Explanation:

We know,

According to the high-low method, variable expense = per unit

Given,

Highest cost = $657

Lowest cost = $525

Highest activity = 3,150 miles

Lowest activity = 2,050 miles

Putting the values in the formula,

Variable expense =

= 132/1,100

Variable expense = $0.12 per unit

Taking the highest activity level, total variable expense = $0.12 per unit × 3,150 miles = $378

We know,

Total cost = Fixed expense + variable expense

Taking the highest activity level,

$657 = Fixed expense + $378

Fixed expense = $657 - $378

Fixed expense = $279

a

explanation:

i know